Current State of Medicine Affordability in India

Source: The post current state of medicine affordability in India has been created, based on the article “Imports weaken Indian pharma” published in “The Hindu” on 22nd August 2024

UPSC Syllabus Topic: GS Paper 2 – Governance – Issues relating to development and management of Social Sector/Services relating to Health.

Context: The article discusses how recent government measures, like importing medicines and reducing duties, might harm India’s domestic pharmaceutical industry. It suggests that these actions could make the country rely more on imports and hinder local production, which affects medicine affordability.

For detailed information on Healthcare Expenditure In India read this article here

What is the Current State of Medicine Affordability in India?

1. In 2021, nearly 47.1% of India’s total health expenditure came from out-of-pocket payments by individuals.
2. The government tries to control medicine prices with the Drugs Price Control Order, 2013, but still faces challenges in making medicines affordable.

What Government Policies Are Affecting Medicine Prices?

1. Global Tenders for Medicine Procurement: The Department of Expenditure allows the Ministry of Health to import 120 medicines, including anti-diabetes and anti-cancer drugs, from global markets. This could strengthen the monopoly of foreign companies in India.
2. Removal of Customs Duty: In the 2024-25 budget, the government proposed removing a 10-12% customs duty on three expensive cancer medicines marketed by AstraZeneca to make them cheaper.
3. These policies might discourage local manufacturers, increasing India’s dependence on imported medicines. This reliance could weaken the domestic pharmaceutical industry’s competitiveness.

What Legal Provisions Can Support Local Medicine Production?

1. Section 83 of the Patents Act: Encourages inventions to be worked in India on a commercial scale and ensures they are available at reasonably affordable prices. Patents should not create a monopoly for imports.
2. Compulsory Licences (CL): Can be issued if a patented medicine is not available at an affordable price. An example is when a CL allowed an Indian company to reduce the price of a medicine from ₹3 lakh to ₹8,000.

For detailed information on Compulsory Licensing read this article here

3. Government-Use Licences: Under Section 100 of the Patents Act, the government can authorize the domestic production of patented medicines to protect public health.
4. Updating Biosimilar Guidelines: Modernizing guidelines to eliminate unnecessary trials can reduce costs and time for domestic producers, enhancing local production capacity.

For detailed information on Patent Rules 2024 read this article here

What Changes Are Needed in Regulatory Guidelines?

1. Update and Simplify Biosimilar Approval Guidelines: Current guidelines require mandatory animal studies and clinical trials, which are resource and time-intensive. These are no longer mandatory in countries like the U.S. and EU, where regulations are more stringent.
2. Eliminating duplicative requirements, as suggested by the International Generic and Biosimilar Medicines Association, can reduce costs and increase patient access to affordable medicines.
3. Align with Global Standards: WHO and U.K. guidelines treat clinical trials for biosimilars as exceptions, not the rule. India should adopt similar standards to reduce unnecessary burdens on domestic producers.

Question for practice:

Discuss how recent government policies and regulatory guidelines might affect the affordability and local production of medicines in India.