The Hindu Business Line : Appetiser done, pharma cos await main course

AS the dust settles on sops offered on specified life-saving drugs in the mini-budget, ground realities reveal that the pharma industry is not too elated with the impact of announcements made earlier this month. In fact, given its "minimal impact," pharma representatives hope that the mini-budget was just the appetiser and the main-course would be served up sooner.

Domestic pharmaceutical industry officials feel that the mini-budget reeks of a pre-election promise that makes more claims than it actually delivers. "There is little to trigger a downward price revision that would benefit a large section of consumers. Hopefully the forthcoming budget, early or truncated as it may be, brings in more substantial measures," they add.

Elaborating how the mini-budget impacts a small section of industry and a smaller number of patients, Mr Nihchal Israni, former president with the Indian Drug Manufacturers' Association observes: "The Indian drug industry, including exports, is an estimated Rs 30,000 crore. The five per cent reduction on peak customs duty on specified life saving drugs and the removal of the four per cent special additional duty targets imported formulations of life saving drugs, worth about Rs 1,500 crore and a bulk drugs segment of about Rs 800 odd crore. Looking at the big picture, this means minimal impact for the industry and still less for consumers of life-saving drugs."

Cipla's Joint Managing Director, Mr Amar Lulla agrees: "Whether lowered import duties will result in a reduction of prices would depend on whether the suppliers of ingredients don't play up prices before that."

Companies that stand to benefit from the cut in peak customs duty include - Eli Lilly's drug Xigris for Sepsis; Valgancyclovir an anti-viral from Roche and Infliximab for Cohn's disease from Fulford, among others.

IDMA's Mr Dara Patel observes that the Government needs to look at the central excise duty of 16 per cent that is imposed on the domestic drug industry, if it does not want to make local manufacturers uncompetitive.

In agreement is Mr B.K.Raizada, adviser to Ranbaxy: "If the Government wants to make a difference to the consumer, the list of imported drugs (on which customs tariffs are cut) should be made dynamic, without losing sight of the level playing field for domestic manufacturers.

``The list comprises about 245 drugs and drugs are always added to the list and never deleted, even if the global prices make it uncompetitive to import!"

Still a difficult dose

PATIENTS suffering from Sepsis or "blood poisoning" will get some reprieve, as Eli Lilly in India has cut the price of Xigris, an effective drug to combat the disease. Mr Rajiv Gulati, Chairman and Managing Director, with the company told Business Line that the total cost of treatment, at about Rs five lakh, had come down by at least Rs two lakh. "Each vial has a retail price of about Rs 82,000 and the price is down to about Rs 55,000 now. On an average a patient needs about seven vials and the price still remains steep for an average patient," he admits. Small comfort, unless the Government adds to the starters that it has already dished out. — Our Bureau

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