‘We hope bilateral pharmaceutical trade between the US and India will grow at or above 10 per cent’

The US-India Business Council (USIBC) led a Pharmaceutical & Biologics Executive Mission to Hyderabad and New Delhi late last month. Amy Hariani, Director, USIBC who manages the life sciences portfolio, reveals more in an interview with Shalini Gupta

What was the objective of the meeting?

One year after the Modi government came to power, we wanted to better understand the government’s priorities and align pharmaceutical investments with some of the campaigns that the government has been pushing such as the “Make in India” and “Innovate in India”. Our purpose was how can we as a pharma industry partner with the government given our objectives and interest, invest more in India and in turn innovate more.

What were the main points of discussion?

We wanted to communicate to the government that we see a lot of positive signs coming from this new government, a positive momentum on intellectual property front with the new draft IP policy and a lot of willingness to understand the industry’s concerns. We are optimistic and keen to partner with the government. Continued positive outcome and resolution around three areas that we consider important would help further attract more investment from the US in the future. Right now there is a lot of uncertainty on the pricing of pharmaceuticals. Intellectual property is the second area where we think things are moving in the right direction and we would want to work closely with the government. We understand that the IP taskforce has submitted its report to the government and we look forward to it. There’s still a lot of uncertainty around clinical trials with a lot of court cases pending, but we think that if the government continues to tweak the regulations, it’ll help bring in a lot of predictability on this front.

What are your views on pricing? How’d the expansion of the essential medicine list under price control affect MNCs?

We recognise the GoI’s efforts to make more medicines affordable to Indians. We believe it is a cause shared by  all governments worldwide, an overarching desire to make medicines affordable. Even as the government is trying to develop the pricing policy with those objectives in mind,  it is imperative that they keep in mind the investment climate as well. This balance would be a bit difficult. NLEM 2011 was a really great example where government, patient groups, NGOs and industry came together to develop a model and pricing mechanism that was transparent, predictable and a win-win for everyone. There needs to be continued stakeholder consultation, opportunity to comment and engagement with the government . We need to develop pricing models with those factors in mind.

India has been again placed on a priority watch list as per the latest USTR report. Would you still say that India’s IP policy is on the right track?

India’s stance on intellectual property has been evolving in a positive manner over the last several years. USIBC is working to not only promote a spirit of dialogue between businesses and governments in a goal-oriented manner, but also making sure that the people of India can create and have access to innovative products.  While USIBC member companies still have challenges with regard to intellectual property policies in India, we are encouraged that the current government is engaged and examining key IPR issues, as noted in the Special 301 Report.

What is your stance on clinical trials?

We believe that having a clinical trial system is integral to an innovative ecosystem, so that one is able to strengthen R&D, which in turn impacts manufacturing. We are happy that the government continues to recognise that further changes need to be made to the clinical trial system. The Ranjit Roychowdhury report was a step in the right direction, but it will take some time to get back to the momentum in the industry that was before 2012. There’s still some ambiguity on what is an adverse event, how it is defined and compensation as well. The government seems to want to get it right.

Any discussions on the biosimilar front?

We think biosimilar guidelines are a step in the right direction, however we are going to very carefully observe how they’d be implemented. We continue to urge the Department of Biotechnology to  have discussions with other governments which are implementing these regulations so that there is some harmonisation.

FDI in pharma has been in the eye of a storm. Your comments.

We had good discussions with the government on recognition in the brownfield where it should be 100 percent. There appeared to be a concern that acquisitions were leading to an increase in the prices of medicines , but empirical data reveals otherwise. There continues to be a sufficient amount of competition in the market which is being monitored by CCI.

How much of the current business between the US and India is coming from the pharma sector?By how much do you hope this will increase to in the next few years?

The current US-India trade is heavily skewed towards the Indian pharma industry. Out of the total imports from India into the US at $41.8 billion in 2013, $4.5 billion, or roughly 10 percent was pharma imports from India. Conversely, total US exports to India was $21 billion and while exact numbers are not available, I would expect that less than one per cent of this trade is US pharma imports to India. We hope the bilateral pharma trade between the US and India will grow at or above 10 per cent.

How much investment has so far been made in the pharma sector in India?

It is difficult to say with certainty what the investment in the pharma sector has been, especially state-wise. If I had to take a very rough guess, I would say over the last five years, the US pharma sector would have invested about $500 million to $1 billion annually.

How much investment are you looking at in Telangana and Andhra Pradesh in the next few years? What policy and regulatory guidelines make it conducive for companies to invest here?

Our companies are not looking at making a certain investment target in either Telangana or Andhra Pradesh.  Instead, they are looking at states that are offering the best incentives, ease of doing business, and predicable and transparent policy environment. If any state, Telangana or AP included, offer those to the companies, it would naturally become more attractive for pharma investment.

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