Explained: CCI market study on pharma sector

What is the News?

Competition Commission of India (CCI) has released a report titled ‘Market Study on the Pharmaceutical Sector in India: Key Findings and Observations’.

What are the key findings of the report?

Pharmaceutical Sector: Globally, India ranks 3rd in terms of pharmaceutical production by volume and 13th by value.

Out of Pocket Expenditure(OOPE): Pharmaceuticals including generic drugs account for about 43.2%  of out of pocket healthcare expenditure in India and about 62.7% of the total health spending in the country.

Generic Drugs: India is the largest supplier of generic drugs globally. However, the market for generic drugs is driven by brand competition instead of price competition despite such drugs being functionally and chemically identical. 

Note: Generic drugs are chemically identical to drugs that once had patent protection.

Online Pharmacies: The share of online pharmacies stood at 2.8% in 2018. The sector’s reach has now expanded during the pandemic to 8.8 million households from 3.5 million households prior to the pandemic.

What are the suggestions given by the report?

Necessary regulations should be enforced to safeguard patient privacy and protect sensitive personal medical data.

Data and digital technology can be used effectively to improve access to and efficiency of healthcare delivery.

Online pharmacies should adopt self-regulatory measures in the areas of collection, use, sharing of data and privacy.

Effective price competition in generics can benefit consumers and improve access to affordable healthcare. 

National Digital Drugs Databank should be created and made available to regulators, industry, physicians and consumers to address information asymmetry in the sector.

CDSCO (Central Drugs Standard Control Organisation) should ensure uniform and consistent application of quality standards.

There should be an increase in the frequency of testing of drugs and in the capacity of drug testing labs.

Source:  This post is based on the following articles: 

• “Explained: CCI market study on pharma sector” published in Indian Express on 20th November 2021.
• “CCI releases key findings and observations on Market Study on the Pharmaceuticals Sector in India” published in PIB on 19th November 2021.