Mumbai: The transportation costs of Indian drug firms may fall by 15-20% once a dispute between India and Europe over drug shipments is resolved, the chief of an industry body told Reuters on Friday.
“Since we were not able to send drugs via European route the cost had gone up,” N.R. Munjal, president, Indian Drug Manufacturers’ Association (IDMA), said.
“Since the dispute is almost resolved, the shipments to Latin America, Africa and other regulated markets would cost us less,” he added.
The government of India and the European Union last year decided to resolve a dispute wherein shipments of Indian drugs were seized at various European locations.
If the dispute is resolved, Indian drug firms would export more drugs with better margins, he said, adding India’s drug exports stand at Rs45,000 crore annually.
The IDMA expects the central government to have benchmark prices for essential drugs instead of revising the national essential medicines list, Munjal said.
Companies have to sell drugs listed under “essential medicines” at a much lower rate.
The government is working to revise the national essential medicines list and plans to include key drugs from oncology and AIDS treatment segments in the revised list.
“The government should put all the essential drugs under the rural health mission programme instead of revising the list because deciding which drug is essential or not is relative,” he said.
The IDMA expects the government as well as the National Pharmaceutical Pricing Authority (NPPA) to have a long term policy for pricing of drugs instead of the essential medicines list, he added.
On Friday, IDMA will sign an agreement with Chinese Pharmaceuticals Association, which would give Indian drug makers access to the highly regulated Chinese market, which is slated to become the second-largest drug market in the world, followed by the US, over the next few years, he said.
India sources about 70% of intermediates for bulk drugs from China but does not have access to the market due to tight regulations, he said.
“The agreement would help in resolving issues related to pricing and drug regulations,” he added.