Pharmaceutical industry has welcomed the suggestion of economic survey tabled today in the Parliament, which mentions decontrolling the prices of drugs in the country.
"Intrusive price control has always resulted in manufacturers moving away from price controlled products. Therefore, what is enunciated in the Economic Survey, is a step forward in the right direction," Ranbaxy President Ramesh Adige.
Intense competition in the Indian pharmaceutical industry has led to almost all drugs being available at the lowest possible price in the world, he added.
Echoing similar sentiments, Indian Drug Manufacturers Association (IDMA) Executive Director Gajanan Wakankar said, economic survey's recommendation is a progressive thinking as excess price control on medicines may result into drugs vanishing from the market.
This has happened in past also. The most effective way of controlling the prices is to increase the competition and removal of bottlenecks which led to the increase in prices, Wakankar said.
The Economic Survey has called for decontrolling of drug prices and limiting the checks only to essential drugs, which have less than five producers.
The previous government had drafted a National Pharmaceutical Policy that aimed at increasing the national list of essential medicines to 354 from the current 74.
The drug industry had opposed the move saying it would kill the innovation and the matter was referred to Group of Minister (GoM), but the policy is yet to see the day light.
The survey meanwhile has lauded the country's pharma industry and said it is taking leaping strides in innovative drug discovery with clinical trials underway in 34 molecules.
"The Indian pharma industry is taking leaping strides in innovative drug discovery with clinical trials underway in 34 molecules. Consequently, the Indian drug discovery market has grown from $470 million in 2005 to $800 million in 2007," the survey added.
It said the pharma industry has shown high growth — from Rs 1,500 crore turnover in 1980 to Rs 78,000 crore in 2008, garnering about 10 per cent share of global volume production by creating infrastructure and building capacities in complex manufacturing technologies.
It also listed drug discovery through original and contract research & manufacturing, clinical trials and product specific strategies of acquisition and mergers as other reasons for the sector's success.
The survey noted that investments in the pharma sector are now expanding to R&D focused outsourcing areas like clinical trials, data management, lead discovery and optimization, pre-clinical drug discovery in combinatorial chemistry and new drug delivery systems.
It said the pharma sector has attracted FDI of over $1.4 billion during 2000-01 to September 2008, of which $125.3 million inflow was during April-September 2008.
Besides, India's pharma exports have grown from Rs 6,256 crore in 1998-99 to Rs 30,759 crore in 2008, the Survey added. "Pharma exports have been consistently outstripping the value of corresponding imports in the period 1996-97 up to 2007-08. Exports registered a growth rate of 25 per cent in 2007-08 over 2006-07," it added.
For the fiscal 2008-09, production of bulk drugs grew 10 per cent at Rs 15,204 crore and formulations were up 22 per cent at Rs 66,796 crore. For 2008, the domestic sector production was Rs 47,241 crore, accounted for by 10,000 small-scale and 300 large and medium units.