Time for reflection and implementation

Kirit S Javali

The Pharma regulatory environment across the world is getting more stringent. In order to compete in the global market, the Indian pharma market needs a strong and effective regulatory set-up.

The Indian pharma industry is currently undergoing a transition and is at cross roads trying to handle a number of issues like delays in clinical trial approvals, uncertainties over the FDI policy, the new pharma pricing policy, a uniform code for sales and marketing practices and compulsory licensing, and data protection, all of which need immediate attention and a direction.

India has been considered as an attractive destination for conducting clinical trials. This is mainly due to India’s genetic diversity; increasing and varied disease prevalence rates; availability of medical, pharmacy and science graduates, clinical infrastructure and comparative cost advantage.

However, the regulatory delays in the clinical trials are adversely affecting this possibility. The delays and regulatory uncertainty have severely derailed the innovation curve as well as the growth of the clinical trial industry. Ineffective regulatory oversight, need for safeguards for informed consent for vulnerable populations and compensation guidelines for patients for trial related deaths have emerged as major concerns.

Hundred per cent FDI through the automatic route was possible in the pharma sector in India. The FDI policy, however, provides confusing signals. However, certain investments is allowed by the automatic route but after November 2011, some investments require the approval of the Foreign Investment Promotion Board (FIPB) which often comes with conditions. We need a FDI policy which addresses these concerns while ensuring the affordability as well as the availability of drugs in India.

The pharma companies are feeling the effects of the price controls associated with the National Pharmaceutical Pricing Policy (NPPP) which will have a negative impact in due course. However, with a well thought out strategies, a large part of this impact can be negated in the medium to long-term period. While companies have accepted the reality of price controls, one issue which has adversely affected the industry is the timeline for the implementation of DPCO. The industry felt that the government did not provide sufficient time for implementing the new packaging and labelling with the revised prices. There was also lack of clarity about the location where such packaging and labelling activities could be performed.

Another matter which is giving rise to some anxiety in our domestic pharma industry, especially in light of the recent spate of mergers and acquisitions is that as the threshold level for regulation is quite high, the Indian industry may become an easy target for MNCs for acquisition. This attracts the competition law regime to penalise and regulate such behaviour, and ensure that all players play by the rules of free and fair competition in the market. In India, we now have independent regulators i.e. Competition Commission with appeal to the Competition Appellate Tribunal. With this significant move we need to sensitise members of the Competition Commission and the Tribunal to the techniques of modern competition analysis. Further, putting the Competition Advocacy provision to extensive practice is therefore a must. We need to provide the right incentives for innovation which can move India forward on this path and encourage the development of drug products that meet the needs of Indian patients.

Thus, the pharma industry is in need of more regulation since there is no sector regulator and thus, the Competition law can fill in the essential gap. The relationship between IPR and Competition law must be further studied with specific emphasis on the pharma sector.