Drug price control must go: Ficci

A Federation of Indian Chambers of Commerce and Industry (Ficci) report on the pharmaceutical sector says the drug price control order, which puts unrealistic ceilings on prices and profitability, and prevents companies from generating investible surpluses, ought to be liberalised.

The report, "Competitiveness of the Indian Pharmaceutical Industry in the New Product Patent Regime", points out that the regulatory framework should encourage the domestic industry to invest in research and development.

It states that the lowering of tariff-protection and the new MRP-based excise duty regime threaten the existence of many small-scale pharma units.

Units in Andhra Pradesh and Maharashtra are especially susceptible to this because they are involved in contract manufacturing for larger players, it adds.

It also names low investments in R&D, weak linkages between the industry and academia, low expenditure on health care, production of spurious and low-quality drugs, and shortage of medicines containing psychotropic substances as some of the major constraints in the sector.

Ficci has outlined an 8-point agenda to boost the competitiveness of the industry. It calls for increasing funds for R&D from Rs 150 crore to Rs 2,000 crore, income tax exemption on clinical trials and contract research, and tackling the problem of spurious drugs.

The chamber also calls for a more stringent procedure for licence procurement. It also advocates the setting up of separate intelligence-cum-legal machinery with police assistance.