Indian Gov outlines plan to favour drugs containing locally made APIs

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Price controls and procurement programmes would favour drugs containing locally-made APIs under a Government proposal designed to reduce India's reliance on imported ingredients and intermediates.

The Department of Pharmaceuticals (DoP) released the Draft Pharmaceutical Policy last week (see below), explaining the aim is to cut India’s dependence on imported APIs and address concerns about the quality of medicines made in the country.

One of the major areas of concern is a very high dependence on import from one or two countries for the raw material and intermediates needed for manufacturing drugs” the DoP wrote, adding the dependence “has a direct bearing on the drug security of the nation as a whole.”

The authors suggest domestic API production suffered as a result of pricing legislation introduced in the mid-90s – specifically the 1995 Drug Price Control Order and an update in 2013 - which prompted drug producers to source cheap, low quality raw materials from elsewhere to maintain margins.

Today overall more than 60% of APIs are sourced from other countries and in some specific APIs the dependence is 80 to 90%. The situation is more alarming in case of Intermediates of stages prior to APIs and Key Starting Materials (KSMs) which are the building blocks for the drugs.

As a result, our competitiveness and capability in manufacturing some of these API has also dwindled. The new pharmaceutical policy therefore needs to address the ways and means to restore and revive the API and KSM and other Intermediates manufacturing capabilities indigenously.”

Procurement and pricing

To address the dependence on imports and revitalize local API and intermediate production the DoP said drugs containing India-made ingredients could be given preference by Government procurement programmes.

The Department also suggested such products could be made exempt from price caps for five years, with pricing being linked to their proportion of “indigenous content” thereafter. It added that the WTO-recognised principle of Rule of Origin “may be used to give differential ceiling prices calibrated to the percentage of indigenisation”

The Department also suggested the fees importers and manufacturers are charged should be “rationalised to match international standards being followed by the regulators of the larger pharmaceuticals producing countries.”

The DoP also said “all APIs which can be indigenously manufactured should be imported at peak customs duty.”

Bulk drug parks

The DoP also suggested Indian API and intermediates manufacturers would benefit from the establishment of "mega bulk drug parks” where facilities for pollution control and water treatment could be shared.

Such mega parks should provide for clearances for plants with minimum interface/single window clearance of various agencies by placing an official of the concerned department including the Department of Environment within the mega-park itself.”

Draft Pharmaceutical Policy 2017 by Gareth Macdonald on Scribd

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