Seeking a five-year exemption from drug price control, Biocon CMD Kiran Mazumdar-Shaw today asked the government to refrain from ‘ad hoc’ measures so as to enable the pharma sector to build scale to be globally competitive.
Mazumdar-Shaw, who was here to attend the meeting of Board of Trade, said: “When we are trying to invest in expansions, scale up and creating global scale, we need exemption from price control at least for a period of five years.”
Explaining the rationale for such a demand, she said: “This will incentivise investments in our sector because I really believe that this sector is trying to build global scales.”
Criticising the manner in which the government has tried to bring more medicines under price control, she said: “The moment you introduce price control on products that we are investing in a very ad hoc way, I think this also disincentivises investment.”
Later on speaking to reporters after the meeting, she said: “How do you incentivise the pharma sector if you are going to bring in drug price control (in an ad hoc manner)?”
She further said: “If you are making a huge investment, you need a certain returns on investment (RoI), you need be to be assured of that RoI but suddenly mid-term you cannot impose a price control.”
During the Board of Trade meeting, which met after a gap of three years, she said it was discussed “how do we bring in policies that give you some stability and predictability in what your investments and return of investments can be.”
In 2014, the National Pharmaceutical Pricing Authority (NPPA) had brought prices of over 100 non-scheduled drugs under price control invoking paragraph 19 of Drug Price Control Order.
Several industry bodies, including Indian Pharma Alliance (IPA), had criticised the NPPA’s move to cap prices of medicines not under the National List of Essential Medicines (NLEM).
Currently, the government has increased the number of drugs under price control to over 800 formulations, from 628 earlier, bringing medicines used for treatment of diseases such as cancer, HIV/AIDS, analgesics and cardiovascular diseases under its purview.
Stressing on exports, which is a main area of focus, she said it was discussed on how to make “our SEZs more competitive and how do we really focus on the pharma sector, which has already got a global stature and really built greater scale, to make us very very strong and competitive.”
Mazumdar-Shaw said the industry also drew attention on the “pain points” that it faces “in terms of harmonisation that needs to take place between what DGFT is doing and what actually happens at customs, ports and others”.
“Pharma sector grew 10 per cent. We realised that there are some sectors, which have grown and some are impacted severely but on an average we need to focus to be more globally competitive,” she added.
She, however, acknowledged that the Commerce Ministry and DGFT are trying to focus on these pain points and doing away with unnecessary regulations, transaction costs and that kind of things.
When asked if Indian pharma firms have been targeted by the USFDA with many domestic drug makers being red flagged, she replied in the negative.
“I don’t think so, there are enough companies which are US companies also that get warning letters. So we should not think like that. The number of companies here in India are so many and the frequency of auditing is becoming so frequent,” she said.
“Many companies continue to have a very good record and I think some have been unfortunate,” she added.
Kiran Mazumdar-Shaw reiterated that companies must focus on compliance with all the regulatory agencies.