India has one of the best
developed pharmaceutical industries among the developing countries with
over 20,000 units producing between 60,000 to one lakh formulations. The
drug industry in 1999-2000 had a turnover of more than Rs 15,000 crores
in formulations and more than Rs 2,500 crores of bulk drugs. (1).
Annual Report (1996-97) of the Government of India, Ministry of Chemicals
and Fertilisers, New Delhi.
Yet such large scale production
has not had any significant improvement in the availability of drugs to
meet the country's
needs. One of the major reasons for this situation is that, as we have
noted before, most of the formulations produced are unnecessary, being
therapeutically ineffective, irrational and even dangerous.
In 1975, the Hathi Committee which was appointed by the Government of India to analyse the Indian drug industry, recommended a restricted list of essential drugs and that measures be implemented to ensure their production, that a gradual shift be made from brand names to generic names, that price control measures be effected with the aim of making life-saving drugs and essential drugs affordable, that public sector play a leading role in drug production and certain drugs be reserved to encourage the growth of Indian drug companies. The Committee also recommended elimination of irrational drugs. The Committee decried the role played by MNCs and recommended immediate dilution of foreign equity in drug companies up to 40% and progressively to 26%. It had, in fact recommended the nationalisation of foreign drug companies. (See for more details: Hathi Committee, Report of the Committee on the Drugs and Pharmaceutical Industry, Ministry of Petroleum and Chemicals, Government of India, New Delhi, April 1975).
The 1978 drug policy and the 1979 Drug Price Control Order (DPCO) had incorporated some of the Hathi Committee recommendations. It aimed at making essential drugs affordable to the vast majority of people. The drug industry protested against the 1978 drug policy contending that drug production was unprofitable. Concerted efforts by health groups in 1985-86 to get the Government to formulate a rational drug policy incorporating the Hathi Committee recommendations failed dismally. The subsequent drug policies of 1986 and 1995 show a definite tilt in favour of the drug industry.
table proves baseless the drug industry's
claims that the drug price controls made drug production unprofitable.
Source: Express Pharma Pulse, March 12, 1998