India is the largest provider of generic drugs globally with the Indian generics accounting for 20% of global exports in terms of volume. In developing countries, India is rendering yeoman service by providing access to lifesaving medicines at affordable prices. Recently, several Indian pharmaceutical companies are accused of collusion to raise generic drug prices in the US. If guilty, punish them. But the fairness of the trial will be under watch

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Issue background:

• Forty-four US states have together sued 20 drugmakers, seven of them Indian, for the alleged fixing of generic drug prices at levels higher than what the market would set.
• Israel’s Teva Pharmaceutical Industries, the world’s largest producer of generic formulations, allegedly underpins a shadowy cartel designed to exert monopolistic power in the US.
• Fifteen individuals have also been named in the lawsuit filed in a court in Connecticut.
• The complaint alleges that senior executives of the offending companies often met at trade events, conferences, dinners and even golf outings, and kept in touch via phone and email to raise prices and carve up the market among themselves.
• According to the charges, collusion peaked between July 2013 and January 2015, a period when prices of more than 100 generics went up sharply, some by over 1,000%. These allegations are serious and, if proven, could deal a severe blow to Indian drug exporters that count the US as a major market for off-patent drugs.

Issues facing the Pharma industry:

• Because of fewer costs associated with generic medicines, multiple applications for generic drugs are often approved to market a single product; this creates competition in the marketplace globally, typically resulting in lower prices. Pharma sector in India is also facing steep headwinds on account of this.
• There is a lack of proper assessment of the performance of the pharmaceutical industry and its efficiency and productivity and due to this many plants have not survived.
• Unregulated online pharmacies or e-pharmacies emerging in India have been a major concern for authorized setups.
• There has been a significant drop in the flow of prescriptions as the Indian pharmaceutical industry has been witnessing a decline in the overall quality of its medical representatives (MRs).This is mainly on account of lack of training and support by the industry.
• In countries such as Russia, one requires to be a medical graduate to be a pharma sales representative. In the European Union, one needs to pass stringent examinations to become an MR. Once they qualify, they need to renew their certification every three years. But in India, even non-graduates are performing as MRs without proper guidance.

IPR related issues posed a serious threat to our industry, some of them are:

• Granting Compulsory Licences (LCs), although allowed by TRIPS agreement of WTO, western countries are blaming India for disrespecting patents transgressing India’s judicial use.
• Emergence of new agreements like TPP, TTIP, RCEP seriously affect our industry without rational dealing on public health.
• Emergence of Voluntary Licence (VL) in agreements place restrictions on reaching the global markets.

Measures needed:

• India’s strong innovation capabilities aided partnerships would help in overcoming these problems.
• The introduction of pharmaceutical product patents and the mandatory implementation of good manufacturing practices is the need of the hour.
• It is necessary for the Indian pharmaceutical industry to become globally competitive through world-class manufacturing capabilities, with improved quality and a higher efficiency of production, and there is a need to stress on the up-gradation of R&D capabilities.
• Training and development of human resources for the pharmaceutical industry and drug research and development should be done accordingly;
• There is also a need to promote public-private partnership for the development of the pharmaceuticals industry; promote environmentally sustainable development of the pharmaceutical industry; and enable the availability, accessibility, and affordability of drugs.
• Improvement in industrial practices to provide better training and support services for employees to perform their job functions.

Conclusion:

The affordability of healthcare is an issue of concern even in India, and people here would welcome some clarity on the principles of fair pricing vis-à-vis medical products. It is important that the accused companies are given a good hearing. The Government of India has taken up a number of initiatives to create an ecosystem that fosters manufacturing in pharma industries.