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Pharmaceutical industry needs deregulation and decontrol.

Mr. Misbahuddin Khan Chairman PPMA made a plea that pricing policy in the pharmaceutical industry should be deregulated. According to Mr. Khan competition would keep prices at reasonable level. Following are the excerpts:

Q. In the light of the Government policy of privatisation and attracting foreign investment what role do you propose for the PPMA during the year 1992-93?

A. Like the rest of the communities pharmaceutical community also welcomes Government decision of privatisation policy and attracting foreign investment. As you know there is considerable foreign investment in the pharmaceutical industry already. Private sector already controls almost 98% of the pharmaceutical industry. But I feel certain actions are necessary on the part of the Government to favourably attract foreign investment in the field of fine chemicals and raw material for the pharmaceuticals industry, which is altogether a vacant field in the country.

Q. What further actions do you propose in order to attract further foreign investors in the pharnaceutical industry?

A. Pharmaceutical industry is the only industry in the country, which is highly regulated by the government and needs immediate deregulation and decontrol for its development particularly the selling prices should not be controlled when there is no control on input materials. There are already ample industries which cannot only cater the entire need of the country, but also can play vital role in foreign exchange earning. As I already said, the field for basic manufacturing is altogether vacant for which necessary steps be taken for foreign investment.

Q. But don't you think that this will mean ever-escalating retail prices of medicines and life saving drugs?

A. No, I don't think so. On the contrary the tough competition among many pharmaceutical companies manufacturing similar products and forces of supply and demand will force them to keep their retail prices at substantially low and reasonable levels and at the same time maintain the high standards of quality. We are of the opinion that Government should control prices of the essential and life saving drugs and those where adequate competition does not exist.

Q. In that event what fate you see for the formula of leader price and the uniformity prices?

A. There is not need for such formulae. In my opinion economic force should determine the normal selling price. However as said earlier, if government wants to control the prices of essential life saving drugs, there should be no discrimination on fixing prices for more than one manufacturer. One leader price or maximum retail price should be fixed and let the economic forces compel the manufacturers to determine their own selling prices.

Q. What other supports you demand in order to help this industry?

A. As I mentioned earlier, we are now self-sufficient in medicine and are entering into export market as well for which if the government's assistance, in the shape of duty free import of machinery for the production of quality medicines, exemption on taxes, and simplifying the procedure for registration and other regulations is given to us, I may assure you, we will be a good source for foreign exchange earning in very near future.

Q. What steps you would recommend in order to ensure uniform standards of quality of drugs?

A. Basically it is responsibility of every manufacturing unit to procedure the quality drugs and of the standard provided in the official pharmacopoeae. The factors which govern the production of quality drugs inter alia include the quality of manufacturing premises equipment and machinery, laboratory and quality control equipments, and the observance of GP and GLP rules. Accordingly government's control over these factors would also be necessary. I would further suggest that the bigger companies should start the basic research and development activities in this country as well.

Q. You have thus far either recommended to the Government to adopt some policy or give concession to the Pharma Industry. What assurance you can give to the Nation and to the Government to help solve the problem of providing medicines at essentially reasonable rates?

A. As a National Industry we are fully aware of the responsibilities which befell on us. We pledge to serve the Nation by providing medicines at reasonable rates with first rates standards of quality. When the process will be decontrolled the economic forces and tougher competition will definitely bring the prices at reasonable rates. They may be on the higher side in the beginning but will automatically come down to the equilibrium.

Q. We have heard the Pharma Industry is divided into two camps the local and the Organisation of the Foreign Pharmaceutical Manufacturers Group?

A. This distinction is unnecessary. We have only one representative body and that is PPMA. We have on the PPMA executive committee representation of the Foreign Pharmaceutical Manufacturers as well.

Q. But in the past pharma bureau was representing multinational foreign companies and PPMA the local companies. What would be your way of action?

A. Yes, it is correct to a great extent but PPMA is the only representative body of pharmaceutical manufacturing companies. I would try my best that the MNCs should play a vital role in the PPMA and there should be no such distinction in PPMA.
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Publication:Economic Review
Date:Aug 1, 1992
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