Madras HC Constitutes Committee To Boost Indian Pharma Sector; Raises Concern Over Heavy Dependence On Chinese Markets [Read Order]

The order passed by a Single Bench of Justice N Kirubakaran touches upon the growth of pharma sector vis-à-vis Right to Health, contemplates farmers' interest and relative effect of the pharma sector on India's Foreign Exchange.

The Bench was hearing two writ petitions moved by a Chennai-based generic research cum manufacturing company, Vinkem Labs.

The company was aggrieved by lack of support by the banks for its CDR restructuring. It alleged the banks were "pitting their commercial privilege" as against national interest to justify their "malafide refusal" to revive a viable project.

The company further raised concerns with regard to access to quality life-saving medicines to patients suffering from one of the dreaded diseases, Cancer.

The plea for financial restructuring of the company constrained the Court to look into the viability of investing further into the company's operations, which prompted the following remarks,

"Though we do not import medicines as such, we import the active ingredients of a medicine that is known as Active Pharmaceutical Ingredients/Bulk Drugs and make finished dosages out of it for domestic and export purposes.
This dependency handicaps us in responding effectively to security and other breaches by the neighbour. It also makes our patients to more often contend with spurious and sub-standard drugs and placing them in a vulnerable prospect of going without medicines if tensions escalate between the two countries, especially after galwan valley tussle."

(Active Pharmaceutical Ingredients (API)/ Bulk Drugs refer to the ingredients in a medicine that act upon the illness of the patient. These ingredients constitute the nucleus of any medicine)

The Court observed that in early days, India was a "pioneer" in generics and earned the distinction of being Pharmacy to the World. However, gradually, on account of import of API requirements at cheap costs, the country declined to a mere Formulations hub.

It further noted that "an enemy country", China, has taken over the API market in India due to its cheap production cost and resultantly, India, that had once built 99.7% self-reliance in APIs went on to import over 90% of its API requirements from China.

In this backdrop the Court remarked,

"The economic advantage of importing APIs has led India to lose its scientific edge and self-reliance in APIs and India now thrives as a mere Finished Dosage Hub, that is, a country that imports its API requirements and bundles them into finished dosages. On account of this abdication of domestic segment, the patients of our country have to face issues such as proliferation of sub-standard drugs, unavailability of life saving drugs etc."

Farmers' Interest

During the course of hearing, an Association of Farmers indulged in the production of the vinca rosea herb, whose extracts are used to treat cancer, also approached the High Court, in support of Vinkem Labs' plea.

It was highlighted that the proposed project promotes "domestic procurement" which in turn support the livelihood of small and marginal farmers.

The Court was also apprised that there were several Committee Reports suggesting that the Petitioner-company was the only company in India having in-house knowhow for isolation of vinca alkaloids and thus, offering support to the company would not only revolutionize pharma sector, offer quality cancer treatment but also be a response to the emerging Chinese competition in the sphere of growing the herb.

In view of these representations and to address the larger issue of public health, the Court has passed a series of directions including constitution of a Committee comprising of Members from the Central Ministries of Pharmaceuticals and Finance, as well as representatives from Bank of India and NABARD.

The Committee shall be responsible to facilitate all necessary requirements of the Petitioner-company including fiscal and regulatory, for (a) Research & Development (b) Commercialization (c) Development of the Industry (d) Facilitations for regulatory compliances (e) Harnessing potential impacts of the industry including agrarian support, job creation, technology infusion, exports, domestic supply, contribution to the economy, integration with value chains and such other matters as may be deemed relevant.

Further directions may be read in the copy of the order annexed below.

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