perkinelmer-728×90-20191127-1227

Government Role In Indian Pharmaceutical Industry To Achieve Vision 2030

On June 17, 2019, a report on ‘The Indian pharmaceutical industry – the way forward’1 was published by an Indian Pharmaceutical Alliance (IPA) representing research based pharmaceutical companies in collaboration with McKinsey & Co and stakeholders. The report lists the growth ambitions that Indian pharmaceutical industry (‘Industry’) needs to follow to achieve its targets for year 2030 (Vision 2030). The target envisages the industry to establish India as a global leader in life sciences without compromising its domestic growth including accessibility and affordability.

According to the report the industry at its current pace of 7-8% CAGR is expected to grow about USD 80 to 90 billion in annual revenue by 2030. However, with its bold aspirations of a 11-12%….. CAGR, the industry can expect to grow about USD 65 billion by 2024 and about USD 120 to 130 billion by 2030. The four bold aspirations for the industry to target Vison 2030 are:

  1. Growth in domestic market with increased accessibility and affordability.
  2. Potential innovations in next generation inventive products.
  3. Strong hold in the US market by increasing ANDA filing for upcoming off patent drugs, and potential pricing offers.
  4. Grow in unexplored/underutilized markets such as Japan and China.

To achieve this target, the Indian industry requires a huge support from the government and its regulatory bodies either in terms of regulatory policies and a supportive ecosystem or in terms of investment. The government’s role is to:

  1. Accelerate universal healthcare access by strengthening the healthcare infrastructure – Improve healthcare infrastructure and increase usability of digital technologies such as telemedicine facilities, artificial intelligence, healthcare apps and, mobile clinics to accelerate the universal health coverage/access. Improved healthcare access offers a sea of opportunities for health industry including the pharma industry. In addition, the government needs to increase healthcare expenditure from its current 1.2 percent to 2.5 in next five years and then to 5 percent by 2030, in line to match the universal health access of developed economies. Moreover, the government is to empower its citizens to bear the costs of medical care either by bringing them under universal health coverage or insuring their health under ‘Ayushman Bharat’.
  2. Create a stable and supportive regulatory environment for the industry – The Government can create a transparent, easy, and coherent regulatory policy which will reduce the uncertainty regarding pricing and drug approval process. Also lowering the frequency of policy revisions or setting up a periodical review framework can help resolve confusion and revive the trust of pharmaceutical companies towards the government.
  3. Create an independent Ministry for Pharmaceuticals – In order to promote the industry’s interest, a dedicated Union Ministry of Pharmaceuticals can be set up by government to simplify policy making, speed-up the product approval and implementation process, and expedite investment approvals. For example, agencies like CDSCO and NPPA can be brought together under a new ministry for better coordination and quicker decision making.
  4. Primary Focus on API manufacturing to reduce the reliance on imports – The government can provide infrastructural and regulatory support to industry for manufacturing APIs by:
    1. Constructing large dedicated zones
    2. Extending pre-approval of environmental clearance
    3. Enabling existing production facilities
    4. Lowering cost of borrowing to setup API plants
  5. Promote innovation by creating a research ecosystem via –
    • Targeted tax interventions, like competitive tax breaks on R&D investments, capital gains, technology transfers, etc. For example, reducing GST on all drugs to a uniform five percent and not just limited to life saving drugs can help reduce the cost of drugs.
    • Regulatory interventions like –
      • Offering a streamlined policy for clinical trials of innovative products.
      • Offering support to health-tech start-ups and create an investor-friendly environment, with ease of doing business policies.
    • Creating anchor educational institutions for research and innovation that initiate research, provide talent to the industry and collaborate on key strategic initiatives with long-term impact.
  6. Expand and consolidate global footprint and collaborate with international regulatory bodies –The exchange of regulatory best-practices between regulatory agencies of countries will improve the market presence and also help to expedite approvals in large markets like China and Japan. The government can also work closely with the USFDA and other international regulatory bodies to communicate key issues faced by Indian pharma companies and drive the required regulatory changes.

Conclusion

Government support in the form of investments and regulatory interventions is integral to initiate the innovation-led growth of industry. The government has already launched some initiatives that can strengthen the industry but only to some extent; like 18.6 percent increased budgetary allocations for healthcare over five years to boost the domestic market, the launch of Ayushman Bharat Yojana to cover 50 crore beneficiaries under affordable healthcare, attracting pharma investment by intending to set up pharma parks in Andhra Pradesh, Uttar Pradesh and Haryana. Much more intent and application from the government is required for achieving vision 2030. – Mondaq

Share this:

Related Post

Stay Updated on Medical Equipment and Devices industry.
Receive our Daily Newsletter.