New Indian pharma policy and its impact on Pharmaceutical Industry, Benefits to people, Impact on Imports, employment, skill development, marketing practices and impact of policy in ease of doing business.

1. New Pharma Policy (Draft) and its impact on Pharma
Industry in India.
Presented by:
A.Praveen kumar PM/2017/401

2. Introduction to Indian Pharmaceutical Industry :
• Indian pharma Industry has made tremendous progress in the last 40
years. Today we have reached a sizeable sales volume of over 2.1 lac
crores and Indian Pharma’s contribution to exports is over 1.10 lac crores.
• Indian Pharma exports to over 200 countries and has the highest number
of regulated-market approved facilities that produce medicines at lowest
price
Concern’s:
• Drop in the CAGR (Compound annual growth rate) from 15 percent to 8
percent
• Over dependence on imported API’s
• The need to keep upgrading to meet global Quality expectations.

3. Pharma policy Introduction:
• The basic objectives of Government’s Policy relating to the drugs and pharmaceutical sector were
enumerated in the Drug Policy of 1986.
• Although the basic objectives still remain largely valid, the drug and pharmaceutical industry in the
country today faces new challenges on account of globalization and new obligations undertaken by India
under the WTO Agreements.
MAIN OBJECTIVES OF THE POLICY:
• Ensuring abundant availability at reasonable prices within the country of good quality essential
pharmaceuticals of mass consumption.
• Strengthening the indigenous capability for cost effective quality production and exports of
pharmaceuticals by reducing barriers to trade in the pharmaceutical sector.
• Strengthening the system of quality control over drug and pharmaceutical production and distribution
• Encouraging R&D in the pharmaceutical sector
• Creating an incentive framework for the pharmaceutical industry which promotes new investment into
pharmaceutical industry and encourages the introduction of new technologies and new drugs.

4. NEED FOR A NEW POLICY
• Implementation of the Dug Price Control Order (DPCO) 1995
and more recently the DPC) 2013
• Introduction of National Health Policy 2017 that might have
implications for the Pharmaceutical sector.
• Very high dependence on import from one or two countries fro
the raw material and intermediates needed for manufacturing
drugs.
• Concern over quality assurance of indigenously manufactured
drugs for domestic consumption

5. NEED FOR A NEW POLICY (continuation..)
• Approval for a new drug which is a long drawn process and the
average time taken is 2 years.
• More focus on generic formulation to the point of exclusion of
lack of adequate R&D, and the existing R&D also limited to new
process of the same product (NDDS).
• Tough competition even in generic formulations from
neighbouring countries like Korea, Vietnam, Sri lanka and
Bangladesh.

6. NEED FOR A NEW POLICY (continuation..)
• Pharmaceutical companies manufacturing same product with
different brand names and different prices.
• Unethical marketing practices deployed by the drug
manufacturing and marketing companies where doctors are
lured to recommend a particular brand.

7. NEW PHARMA POLICY (DRAFT)
KEY OBJECTIVES OF THE POLICY:
• Making essential drugs accessible at affordable prices to the common
masses.
• Providing a longer term stable policy environment for the
pharmaceutical sector.
• Making India sufficiently self-reliant in end to end indigenous drug
manufacturing.
• Ensuring world class quality of drugs for domestic consumption &
exports
• Creating an environment for R&D to produce innovator drugs

8. NEW PHARMA POLICY INITIATIVES:
• For encouraging end to end indigenous drug manufacturing
including that of APIs and their precursor intermediates, it is
proposed that the formulations produced from indigenously
produced API and its Intermediates (end to end indigenous
production) be given preference in government procurements. Such
formulations be taken out of price control for 5 years and the price
control be linked to the indigenous content of the formulations.
• All APIs which can be indigenously manufactured should be
imported at peak customs duty.

9. NEW PHARMA POLICY INITIATIVES
• For quality control, Bio-availability and Bio-equivalence tests (BA/BE
Tests) will be mandatory for all drug manufacturing permissions
accorded by the State Drug Regulator or by the Central Drug
Regulator.
• Innovation in pharmaceuticals will be encouraged along with generic
drugs in generic (salt names). However, giving brand names to
generic drugs hampers real innovation and shall be discouraged. To
facilitate this, the government will pursue the policy of sale of single
ingredient drugs by their pharmacopeial name/salt name.

10. NEW PHARMA POLICY INITIATIVES
• Loan licensing was decided to be discontinued in phased manner in
the drug policy. Loan licensing has served a useful purpose in the
past when the MNCs wanted to get their drugs manufactured in
India and market it. There was indigenous manufacturing capacity
which was utilized by them. It helped the indigenous manufacturers
gain in expertise and experience as well as in acquiring technology.
However in the present context, when India is saturated with
formulation manufacturing, ‘loan licensing’ is not of overwhelming
benefit.

11. NEW PHARMA POLICY INITIATIVES
• Another variant of loan licensing i.e. It allows manufacturer to
manufacture drug in multiple brand names and gives them to
other manufacturers to market them at price chosen by the
marketer. This will be ruled out by following a principle of one
manufacturer, one salt, on brand name and one price.
• Detailed guidelines for encouraging e-pharmacy with adequate
safeguards will be operationalized and e-pharmacy would be
encouraged in larger consumer Interest.

12. NEW PHARMA POLICY INITIATIVES
• The marketing practices of several pharmaceutical companies create an unfair advantage.
To provide a level playing field, the regulation for marketing practices which is at present
voluntary will be made mandatory. Penalty for violations and an agency for
implementation would also be assigned.
• In fact the DoP had first come out with a voluntary code of conduct for pharma
companies to curb this unethical practice in 2011. But it never got implemented due to
various reasons.
• In 2014 Uniform Code for Pharmaceuticals Marketing Practices (UCPMP) was proposed
which is also a voluntary code to be adopted by the pharma companies.
• Unethical promotion of drugs is a result of increased competition among the pharma
companies and that has only increased over the years.

13. NEW PHARMA POLICY INITIATIVES
• There is no authentic database on pharmaceutical sector. A
database will be created by the Department of Pharmaceuticals
along with the Drug Control General of India (DCGI) on
manufacturer wise, brand wise products and product wise,
brand wise manufacturers.
• Skilling Programme for Pharmacists will be designed to meet
the modern day requirements of drug dispensing.

14. NEW PHARMA POLICY INITIATIVES
• Instead of opening new National Institutes of Pharmaceutical
Education and Research (NIPERs), the existing NIPERs will be
expanded and strengthened. New NIPERs will be located on the basis
of completion and parameters like the one followed in selection of
‘Smart Cities’.
• To support R&D Government shall bring together the industry and
the institutes of higher learning and research in Chemistry, Biology
and Pharmacy for creating synergy
• To further encourage R&D the Government would allow a
concessional rate of customs duty of 0 to 5% on import of specified
goods and services required for R&D in pharmaceutical industry.

15. NEW PHARMA POLICY INITIATIVES
• National List of Essential Medicines will remain the basis of the
medicines to be brought under price regulation.
• The regulator and the Government would be two distinct
agencies.
• NPPA will be strengthened. It will be assisted by and advisory
body for pricing nominated by the Government in the NPPA.
• Prices once fixed by the NPPA shall not be revised by NPPA
unless directed specifically by the government or a higher court
to do so.

16. Policy contribution to Ease of Doing business
• By Encouraging indigenous manufacture of API.
• Shortening the approval process.
• Encouraging R&D by giving concessions on customs duty,
encouraging e-prescription.
• Maintaining a authentic database on Pharma sector.
Support to ‘Make-in-India’ programme
• By encouraging API manufacture indigenously and skill
development of pharmacists.

17. INDUSTRY RESPONSE TO DRAFT PHARMA POLICY
• GOOD ASPECTS OF THE POLICY:
1. Focus on quality and Upgradation of manufacturing.
The need to align our quality practises to global standards and
upgrade is something the industry welcomes. There is a general
consensus that India must upgrade its schedule M to Global
standards for which we have all the capabilities.
2. Skilling
The need to build technical competencies and quality man power
finds a mention in the policy which is welcomed by the industry.

18. INDUSTRY RESPONSE TO DRAFT PHARMA POLICY
3. Support for API sector.
Support for API manufacture by increasing the customs duty of
raw materials and intermediates which can be produced
indigenously will boom the domestic industries.
4. UCPMP ( Uniform code for pharmaceutical marketing practices)
and Cap on Trade margins
Implementation of UCPMP coupled with a cap on trade margins
will be a great positive for ethical marketing companies and will
also help control the price of medicines.

19. INDUSTRY RESPONSE TO DRAFT PHARMA POLICY
5. Focus on R&D
The draft pharma policy proposes many initiatives and incentives to
support investments in R&D. There is also a push for bringing academia
and industry together for creating synergy.
NOT SO GOOD ASPECTS OF POLICY:
1. Making BE/ BA tests mandatory for renewals
With limited centres to perform BE/ BA tests it is not welcomed by the
industry to perform these tests for renewals, However these tests are
necessary for new drug molecules.
2. Proposal of One Company one Drug, One Brand, One price.

20. INDUSTRY RESPONSE TO DRAFT PHARMA POLICY
3. Proposal to Phase out Loan Licensing
Although there is no confirmed data, it is estimated that over 70% of MNC
products and 50% of domestic company products are manufactured under
loan licensing. Stopping this will severely impact the availability of drugs and
also increases the prices since cancelling of loan license will lead to expansion
of the manufacturing facility which in turn will reflect the price.
4. Proposal to move to Generics
This will be catastrophic for Indian pharma. To simplify wish away the concept
of brands will mean that no company will be keen to invest. Good number of
marketing companies will have to close down. There is evidence to show that
having a product under generic has neither helped lower the price nor
benefit the patient in any manner.

21. Benefits to patients from Pharma Policy
1. Patients will see some tangible and some intangible benefits.
Since the policy proposes to expand the scope of price control,
patients can expect price reduction in more number of
products.
2. UCPMP to curb undue allurement of doctors and cap on trade
margins will have an indirect benefit in reduction of prices.
3. The intangible benefits will be a definite improvement in the
quality of products that are prescribed.

22. Benefits to patients from Pharma Policy
4. Investments on quality facilities, R&D and skills development
will bring in better products in the future that are more aligned to
the needs of our country and help employment generation,
exports and Improve Quality of Life for all.