New Delhi: Higher demand for drugs made in India, faster clearance of new drug requests, and tighter inspections – these are some of the ways Joe Biden’s presidency is likely to impact Indian pharmaceutical companies. .
The United States is the largest market for Indian drugs and the change of presidency is expected to have long-term effects on these companies.
One of the ways Biden could affect Indian pharmaceutical companies is his campaign pledge to strengthen the Affordable Care Act, also known as Obamacare. The law, introduced by former US President Barack Obama, aims to reduce health care costs and increase access to health insurance.
Biden’s plan is expected to push for generic drugs, which will favor Indian-origin manufacturers. Generic drugs are equally effective substitutes for brand name drugs and are manufactured as cheaper alternatives once the latter have had exclusive hold on the market for a period of time.
Vinita Gupta, CEO of Mumbai-based drugmaker Lupine, told ThePrint that “with the President-elect’s election promise to cut healthcare costs, we expect an even greater focus on generics to introduce material savings ”.
Lupine is the third largest pharmaceutical company in the United States by prescriptions and its American wing is based in Baltimore, Maryland.
“The location of manufacturing in the United States has also been a concern, but this would lead to increased costs compared to production based in India,” she said, adding that the company remains open to the discussion of the location of manufacturing if the new government offers price relief.
“We would be well positioned to meet this need from both a product portfolio and capability perspective,” Gupta said.
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Expected positive impact
Several public health experts have noted that Biden’s presidency could prove advantageous for Indian companies.
“The arrival of the new president looks positive for Indian generic companies so far as he plans to promote affordable health insurance among low-income groups in the United States,” said BR Sikri, president of the Federation. Pharmaceutical Entrepreneurs (FOPE), a lobby representing national drug manufacturers.
This was also echoed by Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, another drugmaker lobby that represents large Indian companies such as Sun Pharma, Dr Reddy’s and Aurobindo, among others.
“Indo-American relations will continue to strengthen within the Biden administration,” Jain said.
Jain also pointed out that while the Indian pharmaceutical industry has played an important role in the US healthcare system, including providing essential drugs during the Covid-19 pandemic, an analysis of the impact of Biden’s presidency will be a continuous process.
“It would be too early to comment on specific areas just now and that will evolve over a period of time,” he said.
However, the new administration could also lead to more stringent inspections by the United States Food and Drug Administration (FDA) – the country’s supreme drug regulator.
An industry official working with a large pharmaceutical company in Mumbai said, “While we expect increased demand for our drugs, we should expect higher expectations from the US FDA in terms of more inspections. strict and additional warning letters. “
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Why the US market is important
According to data from the Indian Pharmaceutical Export Promotion Council (Pharmexcil), India’s exports to the United States in 2019-2020 amounted to $ 6.74 billion, including exports of formulations (generic ) were set at $ 6.25 billion.
Pharmexcil is a pharmaceutical export organization under the Ministry of Trade and Industry.
In the United States, Indian imports accounted for 24% of drugs in 2018 and one in three tablets is sold there from India.
India’s pharmaceutical industry has also received over 5,000 US approvals for new drug applications submitted for export in April 2020.
Decisions to watch
According to industry experts, when Biden takes office on January 20, his administration’s proposed increase in corporate taxes will be something pharmaceutical companies will need to be careful about.
“This move could help bring new investment and more American businesses to India, as Americans would like to avoid a corporate tax increase,” Sikri said.
“However, on the other hand, it could also pose a challenge for subsidiaries of Indian companies in the United States,” he added.
“Our industry’s biggest expectation of Biden is the promotion of generics and faster approvals of ANDA (abbreviated new drug application). We also plan to do away with the Generic Drugs User Fee Act (GDUFA), ”Sikri said.
GDUFA is a law that imposes payment of fees by companies that sell generic drugs in the US market.
Experts also pointed out that the Modi government’s recent production-related incentives (PLIs) – which are aimed at boosting domestic manufacture of active pharmaceutical ingredients (APIs) and key raw materials (KSMs) of drugs – could play a role. important by diverting investment from China to India.
“The program’s goal of boosting production of key raw materials for drug manufacturing could better position India in terms of supplying drugs and raw materials at competitive prices compared to China. So far, they (Chinese companies) are leading the way in providing APIs and KSMs, ”said the company official quoted above.
But not everyone agrees that Biden can have an immediate impact on the industry.
“Right now, Biden is more concerned about managing the impact of Covid-19,” said Sujay Shetty, leader in pharmaceutical life sciences, India, for PricewaterhouseCoopers (PwC).
“Going forward, we need to see if Biden planned to offer onshore manufacturing and direct government purchasing – which we saw in former President Trump’s executive order,” he said.
August 6, Trump had signed a decree, directing federal agencies to prioritize the purchase of certain domestically manufactured drugs and medical devices.
The move was called favorable for India by the Pharmexcil, as it was intended to help India compete better with other countries that supply medical products to the United States.
With the implementation of this ordinance, India would undoubtedly fall into the range of countries where the purchase cost is 30-40 percent lower.
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