Financial Daily from THE HINDU group of publications
Saturday, May 22, 2004
Industry & Economy - Pharmaceuticals
Pharma industry wears worried look
P.T. Jyothi Datta
Mumbai , May 21
EVEN as the scramble is on for key ministries at the Centre, pharmaceutical circles closely watch how the Left presence on the fringes of Government, will augur for the health of this industry.
The domestic drug industry has much at stake in terms of who will take their battle forward at the World Trade Organisation parleys, for instance. Will the bogey of pricing-control return to haunt pharma companies, as the new Government makes it clear that initiatives will be punctuated with a social binder?
How will the Patents (Third Amendment) Bill get implemented on the ground, once it gets off the blocks? And with pharma companies faced with issues related to medical representatives, it is getting a little hot around the collar for drug companies.
"Health is a priority on the agenda, as affordability and accessibility to drugs is a workers' right," points out Mr Gautam Mody of the New Trade Union Initiative.
But before anyone jumps to conclusion that such sentiment involves over-ruling the sanctity of patents, Mr Dara Patel of the Indian Drug Manufacturers Association, who echoes the observation, adds: "The domestic pharma industry is all for rewarding the innovator company. We don't want the back-door entry to the market, through the ever-greening of patents. This will allow companies to have a monopoly on prices."
And here in lies the worry of multinational pharma companies: "The triggers for compulsory licensing are too low and discretionary. Any situation can be used to paint out a condition to break the innovator company's right."
Dr P.A. Mody, Chairman and Managing Director of mid-sized pharma company Unichem, points out: "It is unlikely that the Patents Bill will be impacted in any major way, since it is a global commitment. As for accessibility and affordability of drugs, the Macro Commission on Health has been set up to look into this. But will this result in the Drug Price Control Order (DPCO) being re-visited? Could well be, because the pharmaceutical industry is the favourite whipping boy, as no one does anything to curb the high costs of hospitals or doctors."
A cross-section of the pharma industry - left, right and center - feel that drug pricing will come under the scanner. "The previous Government tried to reduce the span of control over drugs, but the new DPCO got mired in litigation.
Government will have to understand that they have to loosen controls and let competition keep prices in check," they point out.
Also, with drug companies looking to rationalise manufacturing facilities and give workers the golden handshake, industrial relations will be another front where pharma companies will have to be more judicious, point out industry-watchers.
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