Economic Survey calls for decontrol of drug prices

The Economic Survey has called for decontrolling of drug prices and limiting the checks only to essential drugs, which have less than five producers.     

"Drug price control should be limited to essential drugs in which there are less than five producers. All others should be decontrolled," the pre-Budget Survey tabled today in Parliament said.     

The previous government had drafted a National Pharmaceutical Policy that aimed at increasing the national list of essential medicines to 354 from the current 74.     

The drug industry had opposed the move saying it would kill the innovation and the matter was referred to Group of Minister (GoM), but the policy is yet to see the day light.     

The survey meanwhile has lauded the country's pharma industry and said it is taking leaping strides in innovative drug discovery with clinical trials underway in 34 molecules.     

"The Indian pharma industry is taking leaping strides in innovative drug discovery with clinical trials underway in 34 molecules. Consequently, the Indian drug discovery market has grown from $470 million in 2005 to $800 million in 2007," the survey added.

It said the pharma industry has shown high growth — from Rs 1,500 crore turnover in 1980 to Rs 78,000 crore in 2008, garnering about 10 per cent share of global volume production by creating infrastructure and building capacities in complex manufacturing technologies.     

It also listed drug discovery through original and contract research & manufacturing, clinical trials and product specific strategies of acquisition and mergers as other reasons for the sector's success.    

The survey noted that investments in the pharma sector are now expanding to R&D focused outsourcing areas like clinical trials, data management, lead discovery and optimization, pre-clinical drug discovery in combinatorial chemistry and new drug delivery systems.     

It said the pharma sector has attracted FDI of over $1.4 billion during 2000-01 to September 2008, of which $125.3 million inflow was during April-September 2008.     

Besides, India's pharma exports have grown from Rs 6,256 crore in 1998-99 to Rs 30,759 crore in 2008, the Survey added. "Pharma exports have been consistently outstripping the value of corresponding imports in the period 1996-97 up to 2007-08. Exports registered a growth rate of 25 per cent in 2007-08 over 2006-07," it added.     

For the fiscal 2008-09, production of bulk drugs grew 10 per cent at Rs 15,204 crore and formulations were up 22 per cent at Rs 66,796 crore. For 2008, the domestic sector production was Rs 47,241 crore, accounted for by 10,000 small-scale and 300 large and medium units.