Other options
The government has asked drug companies and different associations to put forward its views on the subject. Several suggestions
have been presented, but opposition to the proposal by multinationals is gaining momentum. Many contend that the buyout would
lead to drug shortages and increased costs. OPPI, the apex industry body of multinational pharmaceutical companies, feels
that the government's move, coupled with its failure to honor incremental innovation, could hinder long-term investments in
the country's pharmaceutical industry.
In addition, OPPI says that several of its member companies may reexamine proposed investments in India. Member firms include
Pfizer (New York), Eli Lilly (Indianapolis), GlaxoSmithKline (London), Bristol-Myers Squibb (New York), Sanofi Aventis (Paris),
Astra-Zeneca (London), Novartis (Switzerland), and Novo Nordisk (Bagsvaerd, Denmark), among others.
Argues Naresh Trehan, president of the Indian Healthcare Federation, "India's healthcare sector is in a dynamic phase of growth,
but the technology being provided must work toward providing affordable healthcare to all." Trehan, who has also been the
past chairman of the Confederation of Indian Industry's national committee on healthcare, added, "It is imperative to accelerate
growth through partnering and aligning with the key stakeholders including the healthcare service providers, medical technology
industry and insurance providers.'"
Paresh Johri, deputy secretary in India's Department of Chemicals and Petrochemicals, said an inter-ministerial committee
has been set up to examine the Australian and Canadian models, where the government fixes the price.
"Given the fact that a consumer in India is not in a position to negotiate prices as happens in the US and most other developed
countries, there has to be some method of pricing which reflects the interests of the consumer," says IPA's D.G. Shah.
Gurdial Singh Sandhu, joint secretary in India's Department of Chemicals and Fertilizers, said several organizations have
also recommended to the government that there should be differential pricing for medical devices used in the treatment of
cardiac ailments in government hospitals so that less affluent people could afford treatment.
The wait ahead
Overall, India's proposal could be significant to the consumer as the cost of sophisticated medical devices adds substantially
to already spiraling medical bills. Some surgical procedures are unaffordable to many patients due to the inflated cost of
catheters and other devices. Some stents, particularly drugeluting ones, are priced at around Rs 1 lakh ($2133) and are clearly
out of reach of the masses.
Whether the government's purported move covers expensive medical devices, generic-generics and even patented drugs, only time
will tell. The fact that there is no discussion between the government and trade bodies on distribution tactics, or on what
price the drugs and devices would be bought and sold has cooled tempers, for the time being. Given that the government is
still debating the various pros and cons of the matter, a final solution may not come any time soon.
"Decision-makers inevitably have different concerns, represent different constituencies, and seek different consequences.
The resulting tug and pull, trade-offs, and negotiations take time," says Prashantamyan Nair, pharma analyst at Mumbai-based
investment firm, Edelweiss Securities. ``In some cases, the choice might be obvious, a 'no brainer,' but more often than not,
the choice is not so obvious. Most times, some sort of agreement is reached, often through a majority vote. That could happen
anytime before the winter session of Parliament, this December.''
A. Nair is a freelance writer based in Mumbai.
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