India's ambitious new deal for pharma

India's department of Chemicals and Petrochemicals has issued a draft pharmaceutical policy for 2006 that includes an ambitious package of reforms. The annoucement pro-vides details of the Indian government's new health tax of 2% (Marketletter January 2 & 9). The draft policy's priorites are listed as strengthening the drug regulatory sys-tem, a public-private partnership for anticancer and anti- HIV/AIDS drugs, a price negotiations mechanism for patented drugs, fixing a ceiling on trade margins and halving excise duty for all pharmaceutical products from 16% to 8%. Other measures outlined in the draft document are the increase of the excise-free threshold for small-scale units from 10.0 million rupees ($230,000) to 50.0 million rupees, computerizing the National Pharmaceutical Pricing Authority, cutting prices for public purchases of drugs in bulk and promoting generic drugs by their removal from the price control regime.

Apart from funding access to medicines for India's poorest people, the health tax would fund the establishment of "pharma parks" in line with already existing textile parks. The plan is for at least 25 units to be established over the next five years with investment sums of up to 20.0 billion rupees. There is also provision for an R&D support fund of 1.50 billion rupees.

Other ideas under consideration are the identification of orphan drugs, an interest subsidized loan for small to medium pharma businesses wishing to upgrade to Good Manufacturing Practices compliance. Finally, the Ministry of Chemicals and Petrochemicals is considering the establishment of an intellectual property unit, to assist business in the patenting process. It is hoped to introduce electronic filing of patent applications.