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Reforms are an integral part of our existence resulting in improved deliverance & transforming our lives. Prime Minister Narendra Modi is adept at coining catchy slogans. In this regard, his slogan of ‘Reform, Perform & Transform’ catches everyone’s attention at one glance & has a deeper meaning. If only all the stakeholders had understood the deeper meaning & done their bit, it would have worked wonders for the industry.
Let us first briefly address the basics. Pharma Industry has two segments- first the Active Pharmaceutical Ingredients (also called Bulk Drugs) & second the Formulations (also called Finished Goods). We will be addressing the issues concerning the Formulations segment as it directly affects the patients.
Traditionally, India has ushered in reforms in governance only when it faced existential crisis. In the pharma industry, major changes were initiated in the pre-GST period when Excise Duty was in force. The then Finance Minister Mr. P. Chidambaram initiated a policy to shift the Formulations to MRP based Excise Duty from Ex factory cost. During the same period, to encourage the industry, Excise free zones were declared in the states of Himachal Pradesh, Uttarakhand, Jammu & Kashmir & Sikkim. This led to the rise of contract manufacturing or third-party manufacturing where the marketing companies were not made accountable for quality. As Excise Duty formed a major component of input cost, much of the manufacturing activities shifted to the Excise Free Zones, leading to an exponential rise in the number of companies.
Earlier marketing companies were given approval to manufacture under loan license arrangement where the companies were held accountable for quality. The new system of third-party manufacture was leading to a spate of quality related issues. Therefore, the first step in the reform process must be to revert to the earlier system of loan license arrangement.
In the process of converting an active pharmaceutical ingredient into a formulation, certain inactive substances called excipients are used. The Indian law does not mandate listing the excipients along with active pharmaceutical ingredients on the pack. The government has recently decided to make it mandatory for the companies to list the excipients on the pack. This will really lead to a shakeup in the industry leading to the survival of only those companies which are committed to quality. But the flip side is notification for the same is yet to be issued.
Lastly, the government must initiate major changes in the regulator- Central Drugs Standard Control Organization (CDSCO). A regulator must have all the details of the manufacturing units. Instead, the regulator asks the companies to furnish the details. This shows the extent to which matters have deteriorated.
It is high time the government initiates corrective action in the interest of millions of suffering patients.
These pieces are being published as they have been received – they have not been edited/fact-checked by ThePrint