The pharmaceutical industry needs a more predictable regulatory and intellectual property framework, faster approvals and a reimbursement system to improve patient access and encourage investment in research and development, says Anil Matai, Director General of the Organisation of Pharmaceutical Producers of India (OPPI).
In a media roundtable in Mumbai, Matai also discussed medicine pricing, cancer care costs, patient assistance programmes and India’s ambition to move beyond its strength in generic drugs.
Edited excerpts:
Q. You have argued that reducing medicine prices will not necessarily improve affordability. How do you explain this, especially when patients continue to pay for health care out of pocket?
A: We need to look at affordability in a broader context. If I reduce the price of a medicine by 50 per cent, will that necessarily improve affordability? We need to examine whether the problem is the price itself or the absence of a mechanism to help patients pay for treatment.
In most countries, health care systems have some form of reimbursement, with a payer supporting the cost of treatment. India needs to evolve towards a system in which reimbursement plays a greater role. India has a large population that still struggles to afford health care. We cannot solve this problem through the pharmaceutical industry alone. The government, insurers and other stakeholders have to work together to develop mechanisms that improve access to medicines.
Q. India is one of the world's largest pharmaceutical markets by volume, but its ranking by value is considerably lower. What does this tell us about medicine pricing in the country?
A: India is the third-largest pharmaceutical market by volume, but ranks much lower by value. This reflects the relatively low prices at which medicines are sold here. In many cases, the prices of medicines in India are significantly lower than their global prices. Individual companies follow different pricing models, but India is generally a lower-priced market. Our industry has made medicines available at competitive prices for decades. However, if we want to sustain this advantage and move up the value chain, we must also create an environment that encourages innovation. We should not assume that our strength in generics alone will be sufficient to maintain our position in the global pharmaceutical industry indefinitely.
Q. Trade margins have been under scrutiny, with concerns about medicines being sold at inflated prices. What is OPPI's position on trade margin rationalisation?
A: OPPI has supported the rationalisation of trade margins since the issue first came up in 2019. We believe that excessive trade margins need to be addressed. For most of our member companies, the impact of trade margin rationalisation would be limited because they already follow established trade margins. There may be instances where some margins are higher, but that does not mean the entire industry operates in that manner. The objective should be to ensure that margins across the supply chain are reasonable and transparent. However, effective implementation and monitoring are equally important, particularly among smaller and medium-sized companies.
Q. Cancer medicines are often expensive, and patients have raised concerns about the additional costs charged by hospitals. Where does the responsibility for pricing transparency lie?
A: Pharmaceutical companies supply medicines to hospitals at a certain price. Once the medicines enter the hospital system, the final amount charged to patients is determined by the hospital's own business model. We do not manage hospitals, and our direct involvement ends at the point of supply. Cancer treatment costs therefore need to be examined across the entire healthcare delivery system, rather than looking only at the manufacturer's price. The government has also taken steps to improve transparency around hospital procurement prices. We will have to see how these measures are implemented and what impact they have. Improving access to cancer treatment will require a broader approach involving pricing transparency, reimbursement and greater collaboration between the public and private sectors.
Q. What policy changes would make India a more attractive destination for pharmaceutical research and development?
A: The first requirement is predictability. Pharmaceutical innovation is a long-term investment. If a company invests in research today, it may take 10 to 15 years before that investment produces an outcome. Companies need confidence that the regulatory, intellectual property and pricing frameworks will remain predictable over that period.
One important area is regulatory data protection (RDP). It could send a positive signal to global investors about India's commitment to protecting innovation. We must also recognise that RDP alone will not bring investment. It has to be accompanied by improvements across the innovation ecosystem.
The second priority is streamlining regulatory pathways, including approvals for clinical trials. India has a large patient population, a strong scientific talent pool and the potential to contribute significantly to global clinical research. We must create an environment in which these advantages can be fully utilised.
The third priority is developing reimbursement mechanisms so that patients can access innovative treatments without bearing the entire financial burden themselves.
Q. India has established itself as a global leader in generic medicines. What will it take to move towards innovative drug development and compete with countries such as China?
A: India needs to build on its existing strengths rather than abandon them. Our generic pharmaceutical industry has created a strong foundation, but we also need a second pillar built around innovation.
China has developed an ecosystem that encourages scientists to return, supports research and enables investment to translate into commercial outcomes. India needs to create similar conditions to attract and retain scientific talent.
A significant number of highly skilled Indians work in research and scientific roles at multinational companies overseas. We also have a substantial talent base in India, including researchers, medical writers and analysts working in global capability centres.
The challenge is to create an ecosystem that nurtures this talent, values its contribution and gives scientists the confidence to undertake research in India. If we delay these reforms, other countries will continue to move ahead.
Q. Multinational pharmaceutical companies have introduced patient assistance programmes to help people access expensive treatments. How do these programmes work, and how transparent are they?
A: Patient assistance programmes are designed to help eligible patients access medicines, particularly for conditions that require expensive or prolonged treatment. The process generally begins with the treating physician, who diagnoses the condition and identifies the appropriate medicine.
Depending on the disease, the medicine and the company's programme, the patient may be referred to an administrator that manages the assistance programme. Tata 1mg is one example of an organisation that can administer such programmes on behalf of pharmaceutical companies.
These programmes have defined procedures and are monitored by the companies. Patient confidentiality is also important. Several companies provide information about their programmes on their websites, and the regulatory framework includes disclosure requirements and provisions for risk-based audits.
However, these programmes are not a substitute for a broader healthcare financing system. India needs sustainable mechanisms that enable patients to access treatment without depending entirely on individual assistance schemes.
