Restructuring and change – for a healthier India

In 2008, the Department of Pharmaceuticals was created under the Ministry of Chemicals & Fertilizers with a vision that it would serve as a catalyst for the growth of the pharma industry in the country. 8 years hence, the Indian pharmaceutical industry is said to be the third largest in terms of volume and thirteenth largest in terms of value and the largest provider of generic drugs globally.[1] It is slated to grow at an average of 15% over the next 5 years and thus, will outperform the global pharma industry, which is set to grow at an annual rate of 5% between the same period. This remarkable growth can be attributed to the ability of the industry to rapidly access and adopt new technologies, in addition to its success in evolving an effective mechanism to strengthen research and development.

The Government of India too has repeatedly made positive interventions in the domain. It has been very proactive in boosting growth and investment in the sector. Currently, it allows 100% FDI (Foreign Direct Investment) under automatic route (without prior permission) in the pharmaceuticals sector. Its ‘Pharma Vision 2020’ aims to make India a global leader in end-to-end drug discovery and innovation by 2020. Consequently, the approval time for new facilities has been reduced to boost investments. Further, the Government has introduced mechanisms such as the Drug Price Control Order (DPCO) and the National Pharmaceutical Pricing Authority (NPPA) to deal with the issue of affordability and availability of medicines in the country.

As of the past week, the Government plans to review the existing drug price control measures to make medicines in the country more affordable, while also undertaking a “re-engineering” of the price regulator, NPPA in a bid to bring about greater transparency amid allegations from the industry over arbitrary implementation of policies. This may result in a shift of two fundamental drug industry related departments to the Health Ministry (from the Ministry of Chemicals & Fertilizers) in an effort to cut red tape and improve the ease of doing business. This will satisfy a long-standing demand of the industry and health rights group who have been clamoring for one ministry to take care of all related issues.

The Ministry of Chemicals & Fertilizers, however, is believed not to be happy about the idea and has proposed status quo and the addition of the DCGI under its purview.


[1]Equity Master
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