Pharma PSUs: Missed opportunity?

20170215ep02The turnover of the Indian pharmaceutical industry was estimated at Rs 2,04,627.1 crores in FY2015-16, registering a growth of 29 per cent compared to the growth of 12 per cent from Rs 158,671 crores during FY2013-14. A report released by the Department of Industrial Policy and Promotion and the Department of Pharmaceuticals on January 18 highlights the achievements of the pharma sector under the Make in India initiative.

A key source of revenue is exports. As the report points out in FY2015-16, exports of drugs, pharmaceuticals and fine chemicals was Rs 1,06,212.4 crores. In the generics market, India exports 20 per cent of global generics, making it the largest provider of generic medicines globally.

The report also reveals that Indian Drugs and Pharmaceuticals Limited (IDPL), a Central Public Sector Enterprise under Department of Pharmaceuticals, has modernised the tablet manufacturing section of its Gurgaon plant, which was commissioned with an investment of Rs 3 crores. This has enabled the PSU to mass manufacture new products in the field of diabetes, oncology, nephrology and cardiology at affordable prices.

But this contradicts an earlier announcement on December 28, when the Cabinet had approved the need-based sale of surplus land of the four pharma PSUs to meet their outstanding liabilities. The note goes on to state that further steps would be taken to close IDPL and Rajasthan Drugs & Pharmaceuticals Limited (RDPL) while the option of strategic sale will be explored for Hindustan Antibiotics Limited (HAL) and Bengal Chemicals & Pharmaceuticals Limited (BCPL).

On one hand, the Bureau of Pharma PSUs of India (BPPI) is shutting down pharma PSUs. And on the other hand, as the nodal agency for the implementation of the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), it is tasked with setting up 1000 Pradhan Mantri Bhartiya Janaushadhi Kendras in both urban and rural places of the country to dispense affordable medicines. Its target is ‘Mission 3000’ kendras by March 2017. According to the release, to date, there are over 750 such stores with a portfolio containing 600 drugs as well as 154 surgicals and consumables.

No doubt, the pharma PSUs would need tremendous investments to revamp their facilities but they could have been the source for affordable generics, and it looks as if this strategy has been implemented in IDPL. But clearly, the results have not been good enough for the government to continue the exercise at other pharma PSUs. Thus leaving the field open for private pharma companies, presumably both domestic and MNC, to bid for these tenders.

The fact that the National Yuva Cooperative Society (NYCS) has been roped in as a partner in the PMBJP is also noteworthy, as the scheme is being seen as a means to provide employment. As Mansukh L Mandaviya, Minister of State for Road Transport & Highways, Shipping, Chemicals & Fertilizers put it, “By joining hands with NYCS, the energy of the youth of the country would be channelised in achieving this goal.” Kendras set up in government hospitals will get financial aid of Rs 2.5 lakh and there will be incentives to individuals, with special and softer terms to SC, ST and differently-abled persons.

The policy makers are clearly trying to achieve multiple targets with this scheme: providing affordable safe medicine as well as employment. While this is a smart move, will this meet the objectives, is the question.

Viveka Roychowdhury
Editor

[email protected]

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