Financial Daily from THE HINDU group of publications
Monday, Aug 15, 2005
Industry & Economy
PSU drug cos told to build capacity for anti-retrovirals
New Delhi , Aug. 14
THE fear that India may pay heavily to treat diseases like HIV/AIDS in the post-product patent regime may prove unfounded.
The Government has initiated steps to ensure that drugs for this life-threatening disease are easily available. The Chemicals and Fertilisers Ministry has asked the public sector pharmaceutical companies to gear up by augmenting capacities in order to tackle a situation wherein patent holders can make it difficult for patients to access the medicines due to high prices or short supply.
For starters, the Health Ministry has already given Hindustan Latex Ltd a trial licence to manufacture anti-retroviral (ARV) drugs. The Chemicals and Fertilisers Minister, Mr Ram Vilas Paswan, has asked the public sector drug companies to draw up an action plan.
According to Government sources, "If a patent holder decides to increase the prices of anti-AIDS drugs or if medicines are in short supply, the Government can invoke the compulsory licensing provision whereby other companies would be allowed to manufacture the patented drugs. We want the public sector units to be ready for any situation. Hence, we want them to build capacities as well as strengthen themselves."
However, the public sector pharma companies are not in the pink of health. Hindustan Antibiotics Ltd (HAL), Indian Drugs and Pharmaceuticals Ltd (IDPL) and Bengal Chemicals and Pharmaceuticals Ltd (BCPL) have all been declared sick.
"The Ministry is keen that these companies be revived. In the case of HAL, a Rs 136-crore revival plan has been approved. The Finance Minister had already made a commitment to provide financial support in Budget 2005 and the Board of Reconstruction of Public Sector Enterprises has also approved the proposal. A Cabinet note is being prepared on the revival plan of HAL and IDPL." BCPL, on the other hand has been reporting improved returns. Hence, debt of the company could be recast," said the source.
Currently, India has the second largest number of HIV/AIDS patients, crossing the 5.1-million mark, and companies such as Ranbaxy Laboratories, Cipla Ltd and Hetero are manufacturing ARV drugs. According to industry estimates, in 2004, sales of anti-AIDS drugs to the Government for their free programmes stood at Rs 10 crore, while private sector sales accounted for Rs 50 crore.
This year, sales to the Government are expected to go up to Rs 25 crore, while private sector sales are expected to remain constant.
The issue of availability of ARVs is a major concern for Governments across the world. Recently in Brazil, the National Health Council has recommended to the Minister of Health breaking the patents - by compulsory licensing - of three AIDS medications.
The Ministry has been negotiating with companies manufacturing these drugs for at least two years. The council also proposed that local production be initiated.
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