Is ‘Make in India’ boon or bane for Indian drug companies?

Seeking to make the country a global manufacturing hub, the ‘Make in India' initiative was launched by Prime Minister Narendra Modi in 2014. Widely acknowledged as strategy that will put India as the choice destination for manufacturers with improvement on the ease of doing business quotient, this was one success story waiting to be penned by visionaries to attract foreign investments into the Indian economy.

However, as every coin has two sides to it, so does ‘Make in India'.

Recently, a notice by the Central Board of Excise and Customs has called for the withdrawal of customs duty exemption on at least 74 drugs -- including life-saving ones used to treat cancer and HIV and hemophilia. An increase has also been made in the customs duty rates of certain life-saving drugs.

As per media reports Dr. GN Singh, Drug controller of India, admitted that the government wants to protect the Indian drug industry as ‘various people wanted the government to take measures to protect Indian interests'.

Yet, this move has triggered off anticipations regarding treatment for various ailments becoming costlier.

Concerns have also been raised on the exemptions of duty on imported drugs with Kiran Mazumdar-Shaw, Chairman and Managing Director of biotechnology firm Biocon Limited saying: "We understand the make in India concept, but if duty increases on international drugs, it impacts domestic pricing as well. In principle, we should as a country, save lifesaving drugs from any kind of duty, especially since it's what we claim our national mission to be."

India's drug makers step up investment in U.S.?

It seems that the Indian drug makers are keen on consolidating their share in the U.S. market for generic drugs with reports of deals worth $1.5 billion shaping up in 2015.

Lupin Ltd, India's third-largest drugmaker (by sales), acquired US-based pharmaceutical major GAVIS Pharmaceuticals LLC and Novel Laboratories Inc. (together known as GAVIS) for $880 million (Rs 5,610 crore) in July last year, to strengthen its presence in the generic space in the world's biggest drug market. This was the third acquisition by Lupin in 2015.

Marksans Pharma Ltd, another Indian company acquired US-based generic drug maker Time-Cap Labs Inc. which manufactures over 50 products and has an US Food and Drug Administration ( FDA )-approved manufacturing facility.

Mumbai based Piramal MNC's Piramal Enterprises Ltd had invested $30.65 million (about Rs. 180 crore) towards acquiring Coldstream Laboratories Inc, a speciality pharmaceutical contract manufacturer.

Media reports have suggested that the reason behind Indian companies making such investment decisions is heightened inspection by US FDA, which has time and again called upon Indian pharma companies to step up efforts to improve manufacturing standards. Another reason suggested for Indian companies to invest in the US is their aim to sell ‘more sophisticated products such as high-powered painkillers- which as per FDA regulators must be manufactured domestically.

Domestic companies defend lifting of customs duty exemption

Amidst concerns over the government's imposition of a customs duty of 35 per cent on life-saving drugs, there have been assurances that the Health Ministry and pharma officials are taking steps to address the challenge of price rise.

Stating that patients will not be affected as retail price increase for any drug is highly unlikely, M S Mani, Senior Director at Deloitte in India said: "Indian drug companies are perfectly capable of manufacturing these drugs for our domestic market. In fact, many of the companies are already doing it and exporting it to countries like the US as there is no excise duty."

It was suggested by Devinder Sharma, Deputy General Manager, Paras Healthcare that there are many Indian drugmakers - like Reliance - who could manufacture key lifesaving drugs and ensure their round the clock availability and cost.

Dabur inks pact with government to produce malaria, diabetes drugs

Yesterday, Indian FMCG firm Dabur entered into a pact with the government to produce two new Ayurvedic drugs - Ayush-64 for treatment of malaria and Ayush-82 for management of diabetes.

With over 60 million diabetics in the country, India has earned the dubious distinction of becoming the world's capital of coronary heart disease and diabetes, regarded as a lifestyle disease simply because people who have very less physical activity are more susceptible to it.

Dabur India Head Healthcare Research J L N Sastry said that the Ayurvedic formulations for both medicines were developed by Central Council of Research in Ayurvedic Sciences (CCRAS), an apex research body under the Ministry of AYUSH.

"After successful completion of the project on a specific product, Dabur will market the same with its strong distribution network in India. Dabur may also market some of the already developed products by CCRAS.

At a time when there are mounting concerns regarding life-saving drugs and the price that a common man has to shell out of his pocket to purchase them, such achievements by Indian companies surely come as a relief for millions of people suffering from malaria and diabetes.