Drug industry’s IPR, price control concerns to take centre stage

A Government decision to fix the price on diabetes and heart-related medicines is sure to find an echo in any home that has dealt with diabetes in the family.

But has the Government been arbitrary in taking that decision, leaving the local pharmaceutical industry to deal with shifting goal posts? Or is the Government well within its right to intervene on medicine prices in the interest of public health?

These concerns are likely to come up in a case on Wednesday at the Bombay High Court, after a clutch of companies under the umbrella of the Indian Pharmaceutical Alliance approached the Court on this Government directive.

In fact, this week is set to see the pharmaceutical industry’s twin concerns of price control and intellectual property rights (IPR) take centre stage. India’s track-record on IP protection is also expected to come up during US Secretary of State John Kerry’s visit to India this week.

Earlier this month, the Government had fixed prices on 108 diabetes and cardiovascular drugs by invoking provisions in the Drugs Price Control Order (2013), including Para 19 that allows the Government to intervene in extraordinary circumstances.

Muralidharan Nair, Partner with consultant company Ernst & Young, observes that there are layers of ambiguity around the Government’s decision. So even if they are doing the right thing for consumers, they are going about it in the wrong way, says Nair, adding that greater transparency and discussion should have gone into the decision.

While it is a fact that India has an increasing number of people with diabetes, the industry’s anxiety can be attributed to their inability to plan ahead, as there is always the concern of what will come next under price control, says Nair. And this, despite the deliberation that went into finalising the list of essential medicines and the Government’s decision to cap prices on all 354 drugs.

Discussions followed on the formula to cap medicine prices and this was followed by more discussions on the interpretation of that formula, he points out. Just when all this was getting sorted out between the different stake-holders, the Government pulled out its latest salvo on diabetes and cardio-vascular drugs.

A pharma industry veteran further adds that the Government has been not just arbitrary, even discriminatory, in picking up specific diabetes drugs. For instance, the rationale is not clear why certain drugs in the diabetes segment have been singled out, and not others, he says, referring to the Government’s explanation that price variations were seen on similar drugs made by different companies.

The Government needs to bring out a transparent policy for a specific period of time to allow the industry to plan ahead, says Nair. If they want the industry to serve the local population better, it also needs to give the industry some flexibility and freedom to operate, he points out.

The Government, meanwhile, has stuck to its decision on the additional drugs whose prices it recently fixed.

The local pharmaceutical industry’s eyes are also trained on upcoming discussions with the US Secretary of State. India has received much flak from sections of the US industry and Government on its implementation of the amended Patents Act. Their contention was that India was not doing enough to protect innovative research and data emerging from it. And at the heart of this dispute were major legal judgements involving drugs made by multinational drug companies.

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