After the market-shattering jolts of 2020 amidst the coronavirus pandemic, even the year 2021 has a lot in its pocket for India's pharmaceutical indus...
What Modi 2.0 could mean for Pharma industry?Sunday November 10, 2019 at 8:34 am
Indian Pharma industry in the current times is worth more than Rs 1,20,000. It has grown manifold in the last year and has finally shown double-digit growth despite the rest of the industries suffering a hit. After demonetization and GST, even the Pharma industry had shown stunted growth or de-growth. But today, it is growing at a rate of 11% per annum. But what does Modi govt being in power mean for the pharmaceutical industry?
While customers are happy about getting cheaper medicines, because of the increase in the sale of generic drugs (including anti-cancer drugs), the industry is suffering because of it. The government has decided to undertake upon itself price-controlling, checking fixed-dose combination and is continuing with its unilateral approach.
No check-in place
Drug regulatory institutions have not been strengthened, there has been a rise in spurious drug manufacturers who enter the market producing generic drugs and end up competing with the big players in the market. There is a dire need for investment to strengthen drug regulatory bodies. The industry believes that Modi govt has been harsh on the Pharma sector.
Ban on sale of Fixed-dose combination drugs
The Ministry of Health and Family Welfare in 2016 had banned 344 fixed-dose combinations which had a huge impact on 6000 brands. The industry had to take the matter to court. Such measures like price ceilings, ban on FDCs have been jarring for the industry.
Big Positive in the form of Ayushman Bharat
Ayushman Bharat means that more people will be able to afford healthcare and the demand for drugs will increase in the market. That seems like a good new for the Pharma industry but the industry is fearful of more policy changes. Will the status quo maintain or it will get only worse from here?
Underperforming Healthcare index
Unpredictability in the policies has also led to sector stocks falling and the Healthcare index not doing well on the Sensex during Modi govt’s first term. If any changes are made to the Indian Patent Act, the stocks will further fall.
Strong need for a better environment
The need for strengthening the domestic pharma industry is more than ever today. Along with regulations, there needs to be certain incentives and subsidies to create an enabling environment for the Pharma companies operating in India. There is a need for policies that will make Pharma industry self-sustaining since, with price curbs and strict policies, the availability of essential drugs may become a big problem in the future.
Possibility of a Pharma Ministry?
Modi govt has been focusing a lot on healthcare with its various policies like Jan Aushadi and Ayushman Bharat. The industry is also expecting uniform guidelines i.e Uniform Code of Pharmaceuticals Marketing Practices (UCPMP) to become a reality in the near future. As such, for the greater scrutiny of the companies, there may be a separate ministry for Pharmaceuticals. Currently, the charge of Pharmaceuticals falls under various other ministries like the Ministry of Chemicals and Fertilisers and the Ministry of Health and Family welfare.