Pharmaceutical Policy 2002

Pharmaceutical Policy 2002

Intended Learning Outcomes

At the end of this lecture, the student will be able to:

1.  Indicate the reasons for the implementation of Pharmaceutical Policy 2202
2.  Recall the objectives of Pharmaceutical Policy 2002
3.  Discuss the salient features of this policy

Pharmaceutical Policy-2002

•       The basic objectives of Government’s Policy relating to the drugs and pharmaceutical sector were enumerated in the Drug Policy of 1986.

•       The drug and pharmaceutical industry in the country today faces new challenges on account of liberalization of the Indian economy, the globalization of the world economy and on account of new obligations undertaken by India under the WTO Agreements.

•       These challenges require a change in emphasis in the current pharmaceutical policy and the need for new initiatives beyond those enumerated in the Drug Policy 1986, as modified in 1994, so that policy inputs are directed more towards promoting accelerated growth of the pharmaceutical industry and towards making it more internationally competitive.

•       The need for radically improving the policy framework for knowledge-based industry has also been acknowledged by the Government

•       The Prime Minister’s Advisory Council on Trade and Industry has made important recommendations regarding knowledge-based industry

•       The pharmaceutical industry has been identified as one of the most important knowledge based industries in which India has a comparative advantage

•       The process of liberalization set in motion in 1991, has considerably reduced the scope of industrial licensing and demolished many non-tariff barriers to imports.

Important steps already taken in this regard are: -

•        Industrial licensing for the manufacture of all drugs and pharmaceuticals has been abolished except for bulk drugs produced by the use of recombinant DNA technology, bulk drugs requiring in-vivo use of nucleic acids, and specific cell/tissue targeted formulations

•        Reservation of 5 drugs for manufacture by the public sector only was abolished in Feb.1999, thus opening them up for manufacture by the private sector also

•       Foreign investment through automatic route was raised from 51% to 74% in March, 2000 and the same has been raised to 100%

•       Automatic approval for Foreign Technology Agreements is being given in the case of all bulk drugs, their intermediates and formulations except those produced by the use of recombinant DNA technology, for which the procedure prescribed by the Government would be followed

•        Drugs and pharmaceuticals manufacturing units in the public sector are being allowed to face competition including competition from imports. Wherever possible, these units are being privatized

•        Extending the facility of weighted deductions of 150% of the expenditure on in-house research and development to cover as eligible expenditure, the expenditure on filing patents, obtaining regulatory approvals and clinical trials besides R&D in biotechnology

•       Introduction of the Patents (Second Amendment) bill in the Parliament. It, inter-alia, provides for the extension in the life of a patent to 20 years

•       The impact of the policies enunciated, from time to time, by the Government has been salutary. It has enabled the pharmaceutical industry to meet almost entirely the country’s demand for formulations and substantially for bulk drugs

•       In the process the pharmaceutical industry in India has achieved global recognition as a low cost producer and supplier of quality bulk drugs and formulations to the world. In 1999-2000, drugs and pharmaceutical exports were Rs.6631 crores out of a total production of Rs.19,737 crores

•       However, two major issues have surfaced on account of globalization and implementation of our obligations under TRIPs which impact on long-term competitiveness of Indian industry

•       These have been addressed in the Pharmaceutical Policy-2002

•       A reorientation of the objectives of the current policy has also become necessary on account of these issues:-

1. The essentiality of improving incentives for research and development in the Indian pharmaceutical industry, to enable the industry to achieve sustainable growth particularly in view of anticipated changes in the Patent Law;
2. The need for reducing further the rigours of price control particularly in view of the ongoing process of liberalization

Objectives

The main objectives of this policy are:-

 a. Ensuring abundant availability at reasonable prices within the country of good quality essential pharmaceuticals of mass consumption

 b. Strengthening the indigenous capability for cost effective quality production and exports of pharmaceuticals by reducing barriers to trade in the pharmaceutical sector

c. Strengthening the system of quality control over drug and pharmaceutical production and distribution to make quality an essential attribute of the Indian pharmaceutical industry and promoting rational use of pharmaceuticals

d. Encouraging R&D in the pharmaceutical sector in a manner compatible with the country’s needs and with particular focus on diseases endemic or relevant to India by creating an environment conducive to channelizing a higher level of investment into R&D in pharmaceuticals in India

 e. Creating an incentive framework for the pharmaceutical industry which promotes new investment into pharmaceutical industry and encourages the introduction of new technologies and new drugs

•       In order to strengthen the pharmaceutical industry’s research and development capabilities and to identify the support required by Indian pharmaceutical companies to undertake domestic R&D, a Committee was set up in 1999 by this Department by the name of Pharmaceutical Research and Development Committee (PRDC) under the Chairmanship of Director General of CSIR

•        To qualify as R&D intensive company in India, the PRDC has suggested following conditions (gold standards) :-

1.  Invest at least 5% of its turnover per annum in R&D
2.  Invest at least Rs.10 Crore per annum in innovative research including new drug development, new delivery systems etc. in India
3.  Employ at least 100 research scientists in R&D in India
4.  Has been granted at least 10 patents for research done in India
5.  Own and operate manufacturing facilities in India

Pharmaceutical Research and Development Committee (PRDC)

•       The Pharmaceutical Research & Development Committee has recommended in its report, submitted inter-alia, the setting up of a Drug Development Promotion Foundation (DDPF) and a Pharmaceutical Research & Development Support Fund (PRDSF). Necessary action in this regard has been initiated

•       As far as the question of price control is concerned, the span of control has been gradually reduced since 1979. Presently, under DPCO, 1995 there are 74 bulk drugs and their formulations under price control covering approximately 40% of the total market

•       The functioning of the Drugs (Price Control) Order, 1995, has brought to light some problems in the administration of the price control mechanism for drugs and pharmaceuticals.

Drug Development Promotion Foundation (DDPF) and a Pharmaceutical Research & Development Support Fund (PRDSF).

•       In order to review the current drug price control mechanism, with the objective, inter-alia, of reducing the rigours of price control, where they have become counter-productive, a committee, called the Drugs Price Control Review Committee (DPCRC), under the Chairmanship of Secretary, Department of Chemicals & Petrochemicals was set up in 1999, which has given its report

•       The recommendations of DPCRC have been examined and taken into account while formulating the "Pharmaceutical Policy - 2002"

•       It has emerged that the domestic drugs and pharmaceuticals industry needs reorientation in order to meet the challenges and harness opportunities arising out of the liberalisation of the economy and the impending advent of the product patent regime

•       It has been decided that the span of price control over drugs and pharmaceuticals would be reduced substantially

•        However, keeping in view the interest of the weaker sections of the society, it is proposed that the Government will retain the power to intervene comprehensively in cases where prices behave abnormally

•       In view of the steps already taken and in the light of the approach indicated in the foregoing paragraphs, the decisions of the Government are detailed below :-

I.            Industrial licensing for all bulk drugs cleared by Drug Controller General (India), all their intermediates and formulations will be abolished, subject to stipulations laid down from time to time in the Industrial Policy, except in the cases of

·         bulk drugs produced by the use of recombinant DNA technology

·         bulk drugs requiring in-vivo use of nucleic acids as the active principles and

·         specific cell/tissue targeted formulations

II. Foreign investment upto 100% will be permitted, subject to stipulations laid down from time to time in the Industrial Policy, through the automatic route in the case of all bulk drugs cleared by Drug Controller General (India), all their intermediates and formulations, except those, referred to in para 12.I above, kept under industrial licensing.

III. Foreign Technology Agreements Automatic approval for Foreign Technology Agreements will be available in the case of all bulk drugs cleared by Drug Controller General (India), all their intermediates and formulations, except those, referred to in para 12.I above, kept under industrial licensing for which a special procedure prescribed by the Government would be followed

IV. Imports of drugs and pharmaceuticals will be as per EXIM policy in force. A centralized system of registration will be introduced under the Drugs and Cosmetics Act and Rules made thereunder. Ministry of Health and Family Welfare will enforce strict regulatory processes for import of bulk drugs and formulations

 V. Encouragement to Research and Development (R&D)

(a)    In principle approval to the establishment of the Pharmaceutical Research and Development Support Fund (PRDSF) under the administrative control of the Department of Science and Technology, which will also constitute a Drug Development Promotion Board (DDPB) on the lines of the Technology Development Board to administer the utilization of the PRDSF.

(b)   (b) With a view to encouraging generation of intellectual property and facilitating indigenous endeavours in pharma R&D, appropriate fiscal incentives would be provided

VI. Quality aspects The Ministry of Health & Family Welfare would

     (i)            progressively benchmark the regulatory standards against the international standards for manufacturing,

   (ii)             (ii) progressively harmonize standards for clinical testing with international practices

 (iii)             (iii) streamline the procedures and steps for quick evaluation and clearance of new drug applications, developed in India through indigenous R&D, and (iv) set up a world class Central Drug Standard Control Organisation (CDSCO) by modernizing, restructuring and reforming the existing system and establish an effective network of drugs standards enforcement administrations in the States with the CDSCO as a nodal center, to ensure high standards of quality, safety and efficacy of drugs and pharmaceuticals.

VII. Pharma Education and Training

•       The National Institute of Pharmaceutical Education and Research (NIPER) has been set up by the Government of India as an institute of "national importance" to achieve excellence in pharmaceutical sciences and technologies, education and training

•       Through this institute, Government’s endeavor will be to upgrade the standards of pharmacy education and R&D

•        Besides tackling problems of human resources development for academia and the indigenous pharmaceutical industry, the institute will make efforts to maximize collaborative research with the industry and other technical institutes in the area of drug discovery and pharma technology development

Summary

•       Policy relating to the drugs and pharmaceutical sector were enumerated in the Drug Policy of 1986

•       The policy norms are directed more towards promoting accelerated growth of the pharmaceutical industry and towards making it more internationally competitive

•       The process of liberalization set in motion in 1991, has considerably reduced the scope of industrial licensing and demolished many non-tariff barriers to imports

•       The pharmaceutical industry has been identified as one of the most important knowledge based industries in which India has a comparative advantage

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