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Drug price increase: Good intentions wrong impact

As per the latest notification from the Central Board of Excise and Customs the import duty exemption to 74 drugs have been removed and now to import these drugs import duty will have to be paid.

Let us look at the logic of the government for the same

The main line of reasoning by government of India is that this has been done to promote Indian Pharmaceutical Industry and this will help in the long run.

The drugs impacted are used in treatment of disorders and diseases like

  • Kidney Stone
  • Cancer
  • Pancreas
  • Diabetes
  • Arthritis
  • Hepatitis B
  • Lupus
  • Glaucoma 
  • Leukemia
  • HIV 
and many other, serious illness, so basically drugs across spectrum will now cost more. 

Now who suffers the most ? Normally these are the drugs that are either not made in India thus we need to import them as the amount of these drugs made in India is not sufficient to meet the demand.

So almost everybody will feel the impact of costlier drugs. The bigger challenge is that looking at the price increase the domestic pharma companies may also increase the prices of other medicines that do not come  under DPCO or Drug Price Control Order. 

Now let us examine the government's argument that this will help the local pharmaceutical industry to compete better. But I am unable to buy this argument because the domestic pharmaceutical industry is one of the original strong industry from India even before the IT boom came. 

You are within your right to question how do I know the same. Well for one my first, job was in a pharmaceutical company based in Baroda, in Gujarat the original hot spot of pharmaceutical giants like Sarabhai, Alembic, Torrent, Sun Pharma etc. Later the action shifted to Hyderabad with many a Hyderabad based companies taking lead like - Dr. Reddy's , Matrix Lab, and many other. The only notable exception was Ranbaxy that was Delhi based before it was sold to Japanese giant Daiichi Sankyo and later to Sun Pharma, thus bringing it back home to India.

Now Indian pharma companies may not be the biggest in the globe but they are not the smallest one either, infact in some of the specific fields like Contract Manufacturing, contract research,  clinical trial and research Indian Pharmaceutical companies are some of the biggest in the world and also export to not only third world countries in Africa, Asia and South America but also to developed nations like USA, UK, France, Australia etc.

So for all practical purpose the Indian Pharmaceutical companies are capable of competing with global giants on global scale so I do not buy the reasoning that they need support to compete with global companies on home turf.

For a second even if I buy the argument, then also should we worry too much about the pharma companies or about the poor patients ? I think you will be with me and say that we should be more worried about patients and less about the companies. 

So I will request our government to relook at the policy and work on reducing the price of all the essential drugs by not only lowering the duties but also the local taxes like Sales Tax, etc. on essential medicines being sold in the country. 

Do share your inputs about the same.

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