Placing price controls on 74 bulk drugs led to production and competition in the Indian ingredients supply sector stagnating. India plans to increase competition by dropping the policy and this could have knock-on benefits for the clinical trial sector.
“If India can reinvigorate its bulk drug sector then the country will be better positioned to continue its role as one of the key centres of clinical trial activity”, Adam Bianchi, chief operating officer at Cutting Edge Information, told Outsourcing-Pharma.
Bulk drug manufacturers can supply the small and medium-sized batches of preapproval ingredients needed for clinical trials. As such, a healthy bulk drug sector is beneficial to the clinical trial industry.
Bianchi said: “Bulk drug manufacturing capacity can be coupled with India’s advanced healthcare facilities and personnel, large patient populations and increasingly clear regulatory environment to achieve the goals of both industry and government.”
A vibrant drug industry
Price controls are only one part of India’s strategy for affordable healthcare. Another is having a “vibrant, competitive, innovative drug industry” and the policy suggests a few steps to meet this goal.
The draft calls for: “Promotion of research and development in the pharmaceutical sector…through provision of seed capital, venture capital funding and subsidies to innovative drug companies.”
Another goal is for Indian pharmaceutical companies to meet good manufacturing, laboratory and clinical practices (GMP, GLP and GCP). The policy also says smaller companies should be supported through common infrastructure at pharmaceutical development parks and cluster schemes.
Industry backlash
Despite these efforts to show support for the industry there has been a backlash against the draft. Indian credit rating agency ICRA estimates the number of drugs under price control will triple if the new model is adopted and this has made the industry fearful of its impact.
“As it is we are seeing a low growth phase and with coming National List of Essential Medicines, the industry would slip into a semi-recession stage”, Kewal Handa, managing director of Pfizer India, told Business Line.
Price controls will hit multinational pharma companies hardest, according to analysis by Nomura Equity Research covered in a Myris’ article. The analysis predicts GlaxoSmithKline will be impacted the most by price controls, although the research only covers 21 per cent of the affected market.