The government is reportedly working towards a major overhaul of the drug policy to address grievances of both producers as well as investors. The measures, initiated by the NITI Aayog with the backing of the Prime Minister's Office, include reducing the number of drugs under price control and encouraging investments by relaxing licensing conditions. The policy overhaul is also aimed at ensuring that those manufacturing spurious drugs or violating so-called Good Manufacturing Practices (GMP) are brought to book and penalised appropriately. This is a welcome move as both these sets of changes are urgently required - it's not for nothing that the Supreme Court described India's drug policy as irrational and unreasonable.
On attracting investment, the government's concerns are valid. According to the third edition of the Biopharmaceutical Competitiveness Survey (BCI) released recently, India has slipped a spot to be ranked 19th out of 28 nations in terms of biomedical investment attractiveness. India's overall score was 59 out of 100, while the US was ranked 1st with a score of 86. India scored low on three counts - the regulatory system, market access and financing, and effective intellectual property protections - all of which are necessary to make India a hub for manufacturing pharmaceuticals as well as innovation in medical research. The government is expected to not only simplify the process of granting licences, but also obviate the need for periodic renewals. Singapore is a good example in this regard. Even though it is categorised as a newcomer, just like India, in the BCI, it scored just one point less than the "mature" US. Unlike India, where a licence approval could be stuck in a maze of committees, Singapore grants an application for medical research within 30 days.
An equally important and related requirement of attracting investments is to reform India's drug pricing policy. In recent years there has been a sharp rise in the number of drugs that has been brought under price control - at last count, over 750 formulations could be found on the National List of Essential Medicines. In fact, in May, when government departments paraded a list of their achievements, bringing more drugs under price control was, ironically, exhibited by the department of pharmaceuticals as its most creditable effort. That tradition continues, evident from the recent move to make stents, a small mesh tube used to treat narrow or weak arteries, a component of the National List of Essential Medicines so that they can be brought under price control. The NITI Aayog has pointed out how expanding the scope of price controls is impeding investments. It is high time the government realises a price control regime is an inefficient and self-defeating instrument. In this regard, it is best to be guided by the list of essential medicines issued by the World Health Organisation.
Complementing these two changes should be the changes in monitoring the GMP in the country. This again has been a blind spot for the authorities. The government is now reportedly proposing to levy heavy fines, suspend licences and even jail erring officials in case of GMP violations such as spurious drugs. The Central Drug Standard Control Organisation has worked out a risk-based criterion, with around 150 parameters, for inspection and gauging a manufacturer's compliance. A new drugs and cosmetics bill is also in the offing. But to really make this work the Union government must engage state governments.
