In an interview with CNBC-TV18, DG Shah, Secretary General of the Indian Pharmaceutical Alliance (IPA), talked about the government's decision to ban 344 fixed drug combinations and said the order was bad in law.
Below is the transcript of DG Shah’s interview with CNBC-TV18's Shereen Bhan.
Q: Interim relief at this point in time being given to the pharma companies but what is the big bone of contention because the government's argument is that this was done at the behest of the recommendations of an expert committee. The expert committee in its assessment has found that there is no therapeutic value to the FDCs that are out in the market and that there are better alternatives that are available?
A: If a dozen companies have gone to court and court have readily planted an interim stay what does it speak for the quality of the order and the process of law. Industry has no fun in fighting government and going to court, it is very painful process but it is so frustrated that in every sphere the rules are being interpreted or enforced in a manner where burden of compliance is becoming very heavy on the industry.
Q: There is confusion on the issue on whether a show cause notice was in fact issued, whether companies were called to represent before this expert committee because there are reports that suggest that show cause notices were issued, representatives were called to come and make presentations but no one showed up?
A: This is not true and the way they were drafted and sent out it only meant that you are walking into a trap. So, if the intentions were visible that I am being called only to clinch this deal and declare my product as irrational with a close mind nobody will walk into that.
This is precisely what happened and if government did really do that they can go back to court and publish all the letters and evidence that they were called and the industry did not come which is not true and this is not the way how government and industry should work together. Industry is not opposed to banning irrational combinations. The question is how and what evidence basis and whether you listen to the company or not.
Q: So, you are saying that due process was not followed by the government, representation or time for representation ought to have been given to the industry but let us talk about the case that the government is building and I want you to respond to that because is it not a fact that fixed-dose combination (FDCs) are currently 45 percent of the Indian market, is it not a fact that India's share of the FDC drugs is one of the highest in the world. Is it not a fact that some of these combinations are globally banned, globally not available?
A: Let me answer each of these three questions. These numbers which you quoted where did they come from? What Ministry of Health did was refer 6,220 FDCs to the expert committee, which found only 15 percent of that, that is 963 as "irrational combinations". So, this 45 percent is not true.
Number two, internationally India was the only pharmaceutical market where Intellectual property rights (IPR) regime was relaxed prior to Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Therefore in an IPR regime the product patent which did not exist combining two products made a sense. And you look at this antiretrovirals. The combination which Cipla brought none of the originators were willing to do that. And that has aided the patients, the burden of pill was there 27 pills a day was reduced to 9 pills a day.
Merely because internationally west does not have this doesn't mean that India cannot be an innovative country. In anti TB, anti antiretroviral, anti malaria number of areas India is a pioneer.
Q: You are making a case for where combinations perhaps been innovative and India has perhaps been ahead of the curve but let us also talk about combinations that are banned globally. Nimesulide is a long standing example. We have had this conversation several time in the past as well. Other products as well inducing the likes of Vicks 500 for instance face the same fate globally. So, would you agree that perhaps a blanket ban is unwarranted but perhaps there is need to vet this list and the industry also needs to introspect?
A: I am totally with you and I said that we are not against ban. Follow a new process of law, evaluate and a product which is, say, Pioglitazone, the way we banned it two years ago and then reopened the ban. What was that had gone behind it. Was it patient interest?
The issue is industry could be fully supportive, industry and government has to work hand in hand and look at the patient interest, that is ultimate. But we are being driven to a point which leaves no opening and court is the last resort. And we know that the court is not going to decide whether it is rationale or irrational. We have to go back to the government and sit down and discuss this.
Q: We understand that perhaps this is not the end as far as the banning is concerned on part of the government. Maybe these are reports, I am not sure of the veracity of these reports but the government could consider another 400 drugs being banned as well. Have you heard anything from either the regulator, the government or this expert committee on future course of action?
A: Nothing and I mentioned a short while ago that out of 6,220 the expert committee had identified 963 as irrational. My question is on what basis these 344 were selected first and why remaining were not considered and for one year the government is sitting on this report. Aren't they responsible for hurting the patient interest if these combinations were harmful, why for 12 months no action is taken on this report. Suddenly one fine day you issue a notification that from two days the product is banned.
Q: What is the implication of this ban on the industry because I am looking at the impacted companies, there is a whole bunch of them Abbott, Pfizer, Macleods, Mankind, Sun Pharma, Alkem. On the whole can you give us a broad estimation of the impact of this ban on the industry and secondly what will this mean in terms of the impact on the consumer, are we likely to see prices moving higher?
A: Rs 10,000 crore of turnover will be shaved off in this one year, if all these 963 drugs are banned -- it constitutes 10 percent of the industry's turnover. And as if this is not enough the pricing regulator, another regulator is shaving off few thousand crore more from the pricing side.
Now an industry which even if it grows by 15 percent the net growth will be only five percent. Now which is the bulk drug industry the pharma industry survived so far but if this policies continue who is going to invest in pharmaceutical and for the domestic market they may do acquisitions outside India and serve foreign markets.
But this instability, knee jerk reactions, total lack of transparency because this 963 which I am mentioning to you is our sources of information. Nothing has been put in public domain. Why was Kokate Committee report, this expert committee which first report came in January 2015 were not put on the website. The industry wants to cooperate and work with government not oppose government but we don't see any action.
Q: You are saying that it could be a hit of almost Rs 10,000 crore if not more on the back of the order which seeks to ban these 344 drugs and another couple of Rs 1,000 crore will be shaved off because of the price control notification. Has there been any effort on the part of all of you industry bodies to try and reach out to the highest levels of government. Have you made any attempts to reach out to the Prime Minister for instance to intervene?
A: That is the last step we have not yet done but prior to that we have reached out at every possible level and we have been working on this for the past six months as far as pricing is concerned. Half a dozen letters we have sent to various ministries who are all concerned with this. They agree that yes, you have a point but no action is being taken.
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