DRUG POLICY
1986
Measures for Rationalisation, Quality
Control and Growth of Drugs & Pharmaceutical Industry In India.
Introductory
1.1 Health
is a fundamental human right. The Constitution of India directs the State to
regard the improvement of public health as among its primary duties. The Five
Year Plants have been providing the framework within which the Centre and
States have developed their health services infrastructure and programmes.
Since the attainment of Independence considerable progress has been achieved in
the promotion of health status of the people - as reflected in the
eradication/control of diseases like small-pox, malaria etc., reduction in
mortality rate, rise in life expectancy, creation of a fairly extensive network
of health care institutions and the availability of a large stocks of medical
and health personnel.
1.2 The
National Health Policy of 1983 marks a significant step in the national
endeavour to improve public health. It reiterates India's commitment to the
goal of "Health for all by the year 2000 A.D." through the universal
provision of comprehensive primary health care service. The attainment of this
goal requires an accelerated development of all inputs to the health care
system, including essential and life saving drugs and vaccines of proven
quality. Drugs alone are not sufficient to provide health care. However, if
rationally used, they do play an important role in protecting, maintaining and
restoring the health of the people and in controlling population. The Indian
Pharmaceutical Industry has, therefore, a vital role in serving the basic
health needs of the people.
1.3 The
Report of the Hathi Committee (1975) is an important landmark in the
development of the Indian Pharmaceutical Industry. The Hathi Committee
emphasized the achievement of self-sufficiency in medicines and of abundant
availability at reasonable prices of essential medicines. Since 1975, the
Indian Pharmaceutical Industry has grown to be the most diversified and
vertically integrated pharmaceutical industry in the entire Third World. The
country has achieved self-sufficiency in formulations and also in a large
number of bulk drugs. In 1984-85, imports of formulations were only Rs.10.17
crores or about 0.5% of the total formulation production in the country and
imports of 49 bulk drugs were negligible. Technologies for the production of several
bulk drugs, including antibiotics like Ampicillin, Amoxycillin, Erythromycin,
Anti-infectives like Sulphamethaxazole and Trimethoprim., anti-TB drugs like
Ethambuto Cardio Vascular drugs like Methyl Dopa; Analgesics like Ibuprofen and
Isopropyl antipyrine; anti - amoebics like Metronidazole and Tinidazole,
anti-cancer drugs like Vinblastine, Vincristire and Cisplatin were indigenously
developed. The trade balance in pharmaceuticals is also improving as a result
of increasing exports. In 1984-85, exports of drugs and formulations were
Rs.217.49 crores while imports were Rs.215.62 crores. A wide range of bulk
drugs and formulations are being exported to several countries, including the
U.S. and the West European countries. Some Indian firms have also set up
production facilities in other countries and are also engaged in the sale of
turnkey plants and technical services. The diverse production and technological
capabilities developed by the Indian Pharmaceutical Industry are valuable
assets in achieving the goals of the National Health Policy and in fully
harnessing the export potential.
1.4 While
these achievements are impressive by themselves, there are many areas where the
industry has to reorient itself if it has to effectively serve the health needs
of the people. The present production pattern does not adequately reflect the
genuine requirements of the health care needs of the country. The proliferation
of formulations and packs without adequate therapeutic rationale is a matter of
concern. While many firms in the organized as well as small scale sector have
excellent internal testing facilities and a good record of quality control and
adoption of good manufacturing practices, the same cannot be said of a large
number of firms manufacturing formulations. The present institutional and
statutory arrangements for enforcing quality control for registration of new
formulations, for monitoring adverse reactions and for dissemination of
unbiased information about the safety and efficacy of products marketed in the
country are far from being adequate.
1.5 Abundant
availability on a continuous basis, at reasonable prices, of essential, life
saving and prophylactic medicines of good quality, is the corner stone of the
new measures. It shall be the endeavour of the Government to ensure that the
above objective, which is in consonance with the Government's Policy of
reaching Healthcare facilities to the common masses and with that of ensuring
Health for all by the year 2000 A.D., is achieved. In order to subserve this objective,
changes have been brought about in the system of price control of drugs as well
as in the licensing and approval procedures. Experience gained in the
implementation of the Drugs (Prices Control) Order, 1979 has clearly shown that
the pricing system needs to be simplified and rationalized, if the benefits of
the price control are to be effectively realised by the consumer, particularly
the weaker sections of the society for safeguarding whose interests the
Government is committed. The span of price control at present is impracticably
large covering 347 bulk drugs and over 4,000 formulations marketed in about
20,000 packs. It is proposed to reduce to a considerable extent this span of
control and to make the price control system less cumbersome but more
effective.
1.6 As
prices of drugs are also determined by the cost effectiveness of domestic
production, it is imperative to impart a technological and productivity thrust
to the Indian Pharmaceutical Industry which would also enable it to harness
export opportunities. The objective of ensuring abundant availability of
medicines at reasonable prices, will be best served by promoting competition
and economic scales of production and also by removing unnecessary barriers to
growth. To this end, licensing and approval procedures have been simplified and
greater flexibility given in order to those of essential and life saving drugs.
The validity of this premise has already been established by the experience, in
recent years, with the market prices of bulk is produced by a good number of
manufacturers. At the same time, FERA companies will continue to be regulated
by Government to ensure that their operations are in consonance with the
national objectives and priorities.
1.7 It is against this backdrop that the
Government has reviewed the functioning of the Drug Policy and now restructured
the Policy in the light of the experience gained and keeping in mind the
objective of achieving "Health for All by the Year 2000 A.D."
Objectives
The new measures aim at :
- ensuring
abundant availability, at reasonable prices, of essential life saving and
prophylactic medicines of good quality;
- strengthening
the system of quality control over drug production and promoting the
rational use of drugs in the country;
- creating
an environment conducive to channelising new investment into the
pharmaceutical industry, to encouraging cost-effective production with
economic sizes and to introducing new technologies and new drugs, and
- strengthening
the indigenous capability for production of drugs.
Rational Use of Drugs
3.1
Registration of new formulations, rationalization of existing formulations and
creation of a National Drug Authority:- New formulations based on drugs
already approved for use in the country would not be allowed to be manufactured
unless their therapeutic efficacy and rationality are adequately tested and
proved. A machinery to be called the National Drug & Pharmaceutical
Authority would be established at the Central level, with a permanent
secretariat.
3.2 Registration of new drugs:- With
a view to exercise closer scrutiny over the introduction of new drugs in the
country, the Drugs and Cosmetic Rules will be amended to define clearly a new
drug and to give statutory basis to the detailed guidelines which would be
drawn up for the scrutiny and approval of new drugs.
3.3 Standardisation of packaging:- With a view to ensuring the proper dispensing and use of
drugs, statutory guidelines for packaging instructions would be laid down.
Colour coding of packs would be insisted upon to differentiate products
according to the degree of hazard. Packs would also be standardised.
3.4 Monitoring of adverse reaction:- During
the VII Five Year Plan, Central and peripheral units would be set up to monitor
adverse drug reactions. It is also proposed to develop a Central Information
Bank on the safety, efficacy, prescription and use of all drugs.
3.5 Use of generic name:- Pending a final decision by the Supreme Court, permission
is being granted for marketing single ingredient formulations of new drugs
subject to the following conditions that the generic (Proper) name should be
displayed in double the size of the trade (brand) name both in equally bold
letters. Generic names will be progressively adopted in the case of all drugs
included in the list of essential drugs.
3.6 Apart
from the allopathic system of medicine, it is also proposed to encourage and
improve upon the traditional system of medicine with a view to widening the
coverage of health care schemes of the government. It is a recognized fact that
large portions of our population, specially those in the rural areas, prefer to
use the traditional Indian system of medicine, both for reasons of faith as
also lack of access to the modern medicines; Ayurveda, Unani and Siddha systems
of medicines have been practised in this country for several centuries.
However, there is no uniformity in the methods of preparation of the Compound
drugs in use in these systems, identification of ingredients and their
composition. In order to bring about some uniformity and standardisation,
Ayurvedic, Siddha and Unani Pharmacopoeial Committee constituted by the
Government of India are bringing out "National Formularies". The
Formularies indicate the ingredients with their scientific names, the proportions
in which these drugs are used and the method of preparation. This is the first
phase for the standardisation work before finalising pharmacopoeial standards.
The Pharmacopoeial Committees have now simultaneously taken up the work of
evolving of standards in respect of single ingredient drugs used in these
systems.
3.7 It is proposed to speedily evolve
pharmacopoeial standards in respect of the drugs in these systems and also to
enlarge and reactivate drugs testing facilities in each State in order to
ensure quality control. It is also proposed to take steps for ensuring steady
and regular availability of raw material for the growing pharmaceutical
industry in the Indian systems of medicine both to meet internal as well as
export demands.
Pricing
5.1 Basic Approach:- The Hathi Committee was of the view
that more selectivity in the system of price regulation with a view to ensuring
fair prices of drugs and formulations would be desirable. In the case of
formulations (other than generic), selectivity could be in terms of (a) size of
the units; (b) selection of items, and (c) controlling the prices only of
market leaders, in particular, of products for which price control is
contemplated. An appropriate combination of these criteria is also feasible.
The new pricing regulation - would be in conformity with the principle of
selectivity commended by the Hathi Committee.
5.2 Coverage:- It
is decided to rationalize the present categorization of bulk drugs and
formulations keeping in view the following objectives:
- To stimulate production of
drugs and formulations which are essential to the needs of large majority
of the people of the country;
- To make the price control
system less cumbersome but more effective, by reducing the span of
control;
- To ensure a reasonable return
to the producers of essential drugs, while at the same time restricting
undue increase in their price.
Keeping
this objective in view, it is now decided to have 2 categories of formulations
and bulk drugs required in place of 3 categories which exist at present.
Category 1 would consist of drugs required for the National Health Programme
and the MAPE (maximum allowable post manufacturing expense incurred from the
stage of manufacturing to retailing and manufacturers' margin) allowed for
drugs in this category would be 75%; category II would consist of drugs other
than those in category I but which are also considered essential for the health
needs and a MAPE of 100% for formulations would be allowed while fixing the
prices for this category of drugs.
The
list of drugs in Category II on the basis of these guidelines would be drawn up
within 3 months, by a committee consisting of representatives of Department of
Chemicals & Petro-chemicals, Ministry of Health, Bureau of Industrial Costs
and Prices and some State Governments. Till such time as this is finalized the
existing Drug Price Control Order will continue to be in operation. In the
proposed Drugs (Price Control) Order which would be announced after the list of
drugs in each category is finalized, there would be a stipulation to the effect
that Government will have the right to bring within the ambit to control any
drug in the de-controlled category at any point of time should it be considered
necessary to do so.
With
a view to encourage production of drugs which are more essential to the needs
of the country, incentives, other than the MAPE, would also be considered.
Government would at the same time strictly monitor the prices of drugs of
de-controlled category and for this purpose an effective monitoring mechanism
shall be developed.
5.3 Norms of Pricing:- It
is decided to have a uniform norm for all bulk drugs falling in the controlled
category I and II and the manufacturers will be given the following three
options
- 14% post tax return on net
worth; or
- 22% return on capital employed;
or
- Long term marginal costing with
12% internal rate of return in the case of new plants.
The
maximum retail price of domestically produced items excluding excise duty and
local taxes, if any, would not be higher than ex-factory cost by more than 75%
in the case of category 1 formulations and by more than 100% in the case of
category II formulations. This is to say, MAPE would be 75% and 100%
respectively for category I and II formulations, of the ex-factory cost.
In
respect of imported formulations, selling and distribution expenses, including
interest and importers' margin, shall not exceed 50% of the landed cost.
जय हिन्द
PANKAJ "WELA"
पं.कुमार
20/07/2017
9990841992,7057324799
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