India’s long-awaited National Pharmaceutical Policy has now been drafted, and it focuses both on the affordability of essential medicines and measures to grow the domestic industry, the Minister for Chemicals and Fertilizers, Ram Vilas Paswan, has announced.

Affordability of medicines is now much more important, given the launch on April 1 of India’s new health insurance scheme for families living below the poverty line, the Minister told an international seminar organized by the National Pharmaceutical Pricing Authority (NPPA), India’s drug pricing watchdog. The insurance scheme, which is expected to benefit around 12 million people each year, will be 75% financed by India’s central government and 25% by its state governments.

The minister pointed out that price control will be a vital tool for the government in ensuring essential drugs are affordable and stressed the importance of manufacturers exercising social responsibility in their pricing. The purchase of medicines directly from the manufacturer instead of through middlemen can reduce the costs of drugs by 50%, he added.

Organised with the aid of the UK Department for International Development (DFID), the seminar is the first international meeting of its kind in India, and has been held to both mark the first decade of the NPPA’s existence and draw on the experience of pricing systems around the world.

Indian drug sales “to grow 8% a year’
Meantime, a new report from Deutsche Bank has forecast that drug sales in India will rise 8% annually over the next few years compared to 6% growth worldwide, although the country’s share of the global market will increase only marginally, to account for just 2%.

Drivers of growth will be India’s rising population, its growing number of older people whose demand for medicines is “markedly higher,” and an increase in middle-class households “which have considerably higher incomes at their disposal than the population on average,” says the report.

Turning to the development of the domestic drug industry, Deutsche Bank says the sector is “re-orienting itself and focusing on self-developed medicines and contract research and production for western drugs companies.” Over 80% of medicines from India now go to the USA and Europe, while local drugmakers’ traditional markets - Russia, Southeast Asia, Africa and Latin America – have declined in importance. However, Indian companies' strategic re-orientation away from generics to original preparation is still in the early stages, which means that, within Asia, they will continue to lose out to China, it adds.

“The sooner India manages to close the infrastructure gap, the higher growth will be in the country's pharmaceutical industry,” says Deutsche Bank.