Financial Daily from THE HINDU group of publications
Wednesday, Oct 13, 2004
Industry & Economy
Pharma sector keeping an eye on US poll outcome
P.T. Jyothi Datta
Mumbai , Oct. 12
IT may have been an unlikely venue for a discussion on the outcome of the Presidential elections in the US.
But the healthcare policies stated by the US President, Mr George Bush, and the Senator, Mr John Kerry, in their recent Presidential debates were discussed at a pharma conclave attended by the big guns in the Indian drug industry on Tuesday.
The drug industry is keeping a close watch on the prospects that may open or close on them in case Mr John Kerry wins.
Touching on the various cost pressures faced by big pharma, or the major multinational drug companies, Mr Satish Reddy, Managing Director and Chief Operating Officer, Dr Reddy's Laboratories Ltd, recalled the healthcare issues thrown up at the recent US Presidential debate.
"There are socio-economic pressures related to issues on medicare and the import of cheap drugs from Canada. And, this is putting pressure on the big pharma companies," he said.
Similar references were made by Mr Rupert Hill, Director of the European Healthcare Group, Merrill Lynch International.
Highlighting the different forces at play, he said that President Bush's Medicare Bill had been criticised by the Opposition members as a "draft by the pharmaceutical industry, for the pharmaceutical industry."
The plug will be pulled on import of cheaper drugs from Canada into the US, with safety issues being raised. If Mr Bush wins, the Medicare Bill will come into play by 2006.
But what will happen if Mr Kerry wins?
Canada's drug imports account for a small percentage of the US demand. Mr Kerry is in favour of importing inexpensive drugs from Canada and allowing more government involvement in pricing issues, Mr Hill said.
But who is better for the Indian pharma industry, Mr Bush or Mr Kerry?
"For US-based companies, which don't have the volumes, they are likely to get hurt by some of the proposed policies. The Indian generic drug industry has the volumes. So even if prices get eroded because of competition or some of the policies stated by either candidate, it is unlikely to hurt them," Mr Hill told Business Line.
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