18 May 2023 : The Indian Express

Editorial 1: The best medicine

Context:

• Recently, Global Pharma Healthcare, a Tamil Nadu based firm, was forced to recall an entire batch of eye drops exported to the US after it was linked to vision loss.

Status and Potential of Indian Pharmaceutical Industry:

• India is rightfully known as the “pharmacy of the world” due to the low cost and high quality of its medicines.
• According to the Economic Survey 2021, the domestic market is expected to triple in the next decade.
  • India’s domestic pharmaceutical market stood at US$ 42 billion in 2021 and is likely to reach US$ 65 billion by 2024 and further expand to reach US$ 120-130 billion by 2030.
  • However, this is a miniscule portion of the USD 1.27-trillion global pharmaceutical market.
  • In terms of overall revenue, the Indian pharmaceutical market increased by 13.9% in January 2022.
• India is the largest producer of vaccines worldwide, accounting for ~60% of the total vaccines, as of 2021.
  • Indian pharmaceutical sector supplies over 50% of the global vaccine demand, 40% of the generic demand for US and 25% of all medicines for UK.
  • India is a leading supplier of DPT, BCG, and Measles vaccines.
  • 70% of WHO’s vaccines (as per the essential Immunization schedule) are sourced from India.
  • India has more than 30% share in the global generic market but less than 1% share in the new molecular entity (A novel compound that not previously used in humans) space.
• Globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value.
• More than 80% global Anti Retro-viral drugs come from India.
• Medical Device industry is expected to reach US$ 50 billion by 2030 growing at a CAGR of 15%.
• India is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities as well as a highly-skilled resource pool.

Issues and Challenges in Indian Pharma sector:

• Quality concerns: Recently 48 drugs failed to meet quality standards.
  • 3 percent of all drugs of routine use for hypertension, allergies and bacterial infections were found to be substandard.
  • Similar incidents include death of 12 children in Jammu and 2 children in Himachal Pradesh in 2020 after consumption of contaminated medicine and Cofset cough syrup respectively.
  • In 2021, Nycup syrup was found to have lower active ingredient.
  • In 2022, Indian cough syrups were linked to death of children in Gambia and Uzbekistan.
• Excessive regulation: India has 36 drug regulators. This reduces efficiency, raises costs, increases delays and ups compliance burden apart from issues of corruption.
  • Complex and protracted approval processes (nod for development of new drugs in India takes 33-63 months versus 11-18 months in developed countries).
  • Price Capping Issue: The Indian pharmaceutical Industry is facing pressure from both the government and the civil society to make generic medicines and keep the prices low, reducing their profit margins and scope of investment in R&D.
• Low R&D investment: India only invests 0.7% of its GDP for research and development. This is inadequate as compared to the demand in the sector.
• International Challenges: Global Pharma companies accuse Indian pharma companies as an abuser of Patent laws and often criticize India’s 

Compulsory Licensing Policies. 

• • Dependence on Imports: India nearly 90% depend on China for its Active Pharmaceutical Ingredients (API).

Steps taken by the Government:

• 100% FDI in Greenfield pharmaceutical projects and 74% FDI in brownfield pharmaceutical projects allowed.
• Pharma Vision 2020 aims at transforming India into a global leader in low-cost generics and end-to-end drug discovery and development.
• Patents (Amendment) Rules, 2021 
  • It reduced the fee for patent filing and prosecution for educational institutions by 80% to promote innovation and development of new technologies.
  • Extension of Expedited Examination System for faster granting of patents.
  • Patent Prosecution Highway (PPH) is a set of initiatives for providing accelerated patent prosecution procedures by sharing information between some patent offices.
• Drugs and Clinical Trials Rules, 2019 were notified with an aim to promote clinical research in the country.
  • Reduced the time for approving applications to 30 days
  • Ethics committee will monitor the trials 
  • Drug Controller General of India will decide the compensation
  • Removed regulations on tests conducted on animals
• The government, in 2019, released draft rules for regulating the e-pharmaceutical companies.
• Production Linked Incentive (PLI) Scheme: The PLI scheme aims to promote domestic manufacturing of critical Key Starting Materials (KSMs)/Drug Intermediates and Active Pharmaceutical Ingredients (APIs) in the country.
• Pradhan Mantri Bhartiya Janaushadhi Pariyojana to supply low-cost pharma drugs to the economically weaker sections.
• Establishment of mega ‘Bulk Drug Parks’ and Medical Device Parks in association with state governments.
  • The Bulk Drug parks or Pharma parks will have a designated contiguous area of land with common facilities like solvent recovery, effluent treatment, distillation, etc.

Way Forward:

• Mashelkar Committee 2003 on drug regulations called for 
  • Setting up of a National Drug Authority 
  • Strengthening State Drug Control Organisations
  • Digital Database for patients, drug usage and risk associated with the intake of drug 
  • Industry-Academia Linkages on the lines of US whose Bayh-Dole Act encourages academics to set up independent companies.
  • Revise the ethical code for Pharma companies to discontinue freebies and gifts 
  • Robust Regulation to achieve a 60% reduction in the approval time to be competitive.
  • Increasing the R&D spending to promote innovation.
  • Rework with the IPR policies to make Indian Pharma companies for encouraging more patents. 
  • Need for a National Plan on self-reliance in APIs and avoid over dependence on China. 
  • Need to frame policy to utilise the traditional Knowledge in drug manufacturing.

Basic information:

Central Drugs Standard Control Organization (CDSCO) 

• Central Drug Authority for discharging functions assigned under the Drugs and Cosmetics Act 1940.
• The CDSCO works in the Directorate General of Health services, is a division in Ministry of Health and Family welfare.
• The CDSCO is headed by Drug Controller General of India (DCGI). 
• It was advised by Drug Technical Advisory Board and Drug Consultative Committee.

Editorial 2: A new pension pact

Context:  

• Five states have already announced reversion from New Pension Scheme (NPS) to defined-benefit (DB) Old Pension Scheme (OPS). Now, government has constituted a committee to improve NPS.

Status of Pension in India:

• Mercer CFA Institute Global Pension Index: The 2022 edition of this index ranks India’s pension system at 41 out of the 44 countries it considers.
•  At least 85 per cent current workers are not members of any pension scheme, and in their old age likely to remain uncovered or draw only social pension
• Of all elderly, 57 per cent receive no income support from public expenditure, and 26 per cent collect social pension as part of poverty alleviation
• 11.4 per cent of the elderly draw defined benefit as government ex-workers (or their survivors), cornering 62 per cent of system expense.
• The system for old age income support entailed 11.5 per cent of public expenditure, and state governments bear more than 60 per cent.
  • Contributory program funds invested in government paper soak up 40 per cent of all interest payment of state governments.

New Pension Scheme vs Old Pension Scheme:

Concerns:

• After the implementation of One Rank One Pension scheme, return to OPS will become a huge financial risk for the government especially the state governments.
• Risk of Cutting down on social and development expenditure will affect the poor and marginalised sections of society.
• High Debt burden on state governments will make them further dependent on the Union government for financial support especially to meet fiscal deficit and revenue deficit.
• Higher life expectancy will increase the state liabilities and difficult financial management.

In case of OPS

• Ageing population and longer life expectancy will raise huge burden on the exchequer.
• Pension liability remained unfunded — that is, there was no corpus which would grow continuously.
  • ‘pay-as-you-go’ scheme created inter-generational equity issues — meaning the present generation had to bear the continuously rising burden of pensioners.
• Unsustainable: Pension liabilities climbing since pensioners’ benefits increased every year.
  • Also, better health facilities would increase life expectancy, and increased longevity would mean extended payouts.

In case of NPS

• There is no GPF advantage and NPS has a bit of uncertainty due to its market-linked structure.
• The amount of pension is very low as compared to the OPS.
• No increase with the inflation as such. Depends on the market movements.
• it is a voluntary scheme so many people remain outside of NPS.
• Employees should contribute 10% of their basic salary plus DA towards their monthly pension.
• Many people are unaware of financial terms, such as equities, debt, securities, etc. Hence, they may fail to choose the best NPS fund manager for their investments.

Steps Taken:

• Rajasthan, Punjab, Jharkhand, Chhattisgarh and Himachal Pradesh have rolled out the Old Pension Scheme for government employees and discontinued the National Pension System (NPS).
• Government has set up a committee to improve the NPS.

Basic Information:

A pension provides people with a monthly income when they are no longer earning.

Need for Pension:

• One is not as productive in the old age as in youth.
• The rise of nuclear family –Migration of younger earning members.
• Rise in cost of living
• Increased longevity
• Assured monthly income ensures dignified life in old age