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CURRENT SCENARIO India’s pharmaceutical industry is now the third largest in the world in terms of volume and stands 13th in terms of value. According to data published by the department of pharmaceuticals, ministry of chemicals and fertilizers, the total turnover of India’s pharmaceutical industry between September 2009 and September 2010 was US $ 23.08 billion. Of this domestic market was worth US $ 13 billion.
DRUGS PRICE CONTROL ORDER 1995: The National Pharmaceutical Pricing Authority [NPPA] is mandated to fix and revise prices of scheduled bulk drugs and their formulations under the drugs (price control) order, 1995 and to implement and enforce its provisions. The prices of 74 bulk drugs and their formulations, which account for around 40 percent of the retail pharmaceutical market, are controlled by the Drug Price Control Order (DPCO) of 1995
ESSENTIAL DRUGS The National Essential Drugs List implies that the drugs included in it are adequate to meet the common contemporary health needs of the general population of the country and general obligation of the health administrators to ensure abundant availability of such drugs in the country. The drugs included in this list are generally safe and effective, and are approved by the Drugs Controller General, India, and are currently available at affordable prices to the general public.
Cont…….. This much broad list is to be under control of the Govt. Essential drugs of India consist of 354 drugs – these drugs should easily accessible to the public and at lower cost. Lower expected profits translate into a reduced supply of external capital, which translates into reduced investment.
Pharmaceutical- Export, Retail Sale and Institutional sale by 2011-2012
RESEARCH AND DEVELOPMENT (R&D) Internationally, pharmaceutical companies spend 15%–20% of their sales revenue on R&D, Particularly for the discovery and development of new chemical entities. In the absence of the law for product patents before 2005, Indian pharmaceutical companies had traditionally confined their research activities to processes rather than to products Collaboration with large R&D based MNCs either for co-development or through the co-licensing route.
National Pharmaceuticals Policy, 2006 In 1970, almost all bulk drugs and their formulations were under price control. In keeping with the economic policies of the country the number got reduced to 347 bulk drugs in 1979, 142 in 1987 and finally to 74 in 1995. FDI up to 100% is permitted, subject to stipulations laid down from time to time in the Industrial Policy, through the automatic route in the case of all bulk drugs cleared by the Drug Controller General (India), all their intermediates and formulations.
Cont…. As recommended by the Mashelkar Committee in 1999 a Pharmaceutical Research and Development Support Fund (PRDSF) with a corpus of Rs. 150 crores has been set up under the administrative control of the Department of Science and Technology. VAT has been introduced in India with effect from 1st April,2005. Already 22 States have implemented it .The remaining States are likely to implement it in the near future. VAT on medicines has been kept at 4%
Key policy To ensure availability at reasonable prices of good quality medicines within the country. To facilitate higher investment for increased production of good quality medicines. To promote greater research and development in the pharmaceuticals sector by providing suitable incentives in this regard.
Remedies… Reducing the tax on the pharmaceutical products. Introducing the medicines in subsidized rates. To increase R&D corpus fund. Revision of price control order. Initiating govt enterprises. Increasing competitive behavior.