Pharma sector unimpressed with the Union Budget

Will oppose moves on mandatory prescription of generic drugs

The government Wednesday announced amendment in rules to promote the use of generic drugs while outlining steps to improve the healthcare.

While Jaitley did not specify the details in his budget speech, pharma industry experts believe the government is considering norms to make prescription of generic drugs mandatory.

Typically, doctors prescribe branded products to their patients and there is a view within the government that the cost of healthcare could be reduced by promoting generic medicines. The industry, however, is not enthused with the idea and feels this will be difficult to implement.

In his budget union finance minister Arun Jaitley said the government proposes to amend the Drug and Cosmetic Rules to ensure availability of drugs at reasonable prices and promote the use of generic medicines. New rules for regulating medical devices will also be formulated to attract investments. This will reduce cost of such devices, Jaitley said.

Jaitley also spoke of setting up of All India Institute of Medical Sciences centres in Gujarat and Jharkhand, creation of additional 5,000 post graduate seats in medical colleges and an action plan to eradicate diseases like leprosy and TB. The government will also convert health sub centres into health and wellness centres.

“We do not think making generic prescriptions mandatory will make drugs cost cheaper. A drug manufactured by a top company will still carry a premium over a lesser known firm. While the budget does not make it very clear, we believe amendment could be for making generic prescriptions mandatory. Prima facie it is a negative step. I think the government can introduce it its hospitals but how will it implemented at a countrywide level,” asked D G Shah, secretary general of Indian Pharmaceutical Alliance.

Shah said the government in its drug policy in 1978 had proposed abolition of brand names in respect of five drugs including analgin and aspirin but the same was successfully challenged by manufacturers in the court.

“I would have expected some pro-pharma industry measures in terms of incentives to research and some tax relief. Quality healthcare for India would be better served with a greater focus towards accessibility and availability of healthcare services and infrastructure,” said Murtaza Khorakiwala, managing director of Wockhardt.

“There is a view within the government that the marketing costs of companies will reduce if drugs are marketed as a generic. Chemists will not just be dispensing drugs prescribed by doctors but will have a decision making role. We were expecting relief for domestic drug industry including incentives for active pharmaceutical ingredients but the budget is silent on that,” said a senior executive of a domestic pharmaceutical firm.

“The life sciences sector had great expectations from the budget not only from a fiscal incentives perspective but also from a regulatory angle; more so, given the government’s vision of making India one of the top-three pharmaceutical markets by 2020.  However, this year, too, no specific impetus was given to the sector,” said Utkarsh Palnitkar, national head of life sciences practice, KPMG, India.