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India should take initiative for relaxation of Canadian fixed drug price policy to boost exports of Indian generics: Experts
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Shardul Nautiyal, Mumbai
August 17 , 2023
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The Indian government should consider asserting the need for the relaxation of the Canadian fixed drug price policy to boost exports of Indian generics, according to trade experts observing the developments towards enhancing trade in the wake of India’s growing exports potential with reference to Free Trade Agreements (FTAs) with regulated markets.
India today holds the image as a credible exporter and Pharmacy of the World with 20% generic provider globally and accounts for 40% medicine supplies to the US and 25% to the UK. This speaks volumes about India's huge manufacturing infrastructure, focus on quality and cost competitiveness to provide affordable medicines globally. The Indian pharma industry also has a huge opportunity to grow with projections of being a USD 130 billion industry by 2030.
It has been argued that since the regulations introduced by the Canadian government at the central level are unlikely to change, the focus should be on the provincial level, where pricing flexibilities can be capitalized on. Pricing oral solid products at 25% of the brand reference price when there are 3 or more generic products on the Canadian market does not take into account high manufacturing cost or low selling price. This applies to Indian generics also which is required to be implemented towards price competitiveness and incentivizing the supply chain.
“Prices for patented medicines in Canada are regulated under the Patented Medicine Prices Review Board. The pan-Canadian Pharmaceutical Alliance (pCPA) negotiates prices for drugs supplied to their public health programmes with provincial governments. Such negotiations culminate in a letter of intent. Manufacturers negotiate individual product licensing agreements with each province on the basis of these letters of intent. As a result, pricing across provinces in Canada is not uniform. Additionally, public drug plans are not mandated to list drugs that have gone through negotiations with the pCPA. This has been flagged as introducing the possibility of additional criteria or limitations for each province. The pCPA and the Canadian Generic Pharmaceutical Association have agreed to significantly reduce the prices of generic medicines. Moreover, amendments to the Patented Medicine Prices Review Board’s pricing regulations have been introduced to further reduce the cost of medicines,” informed Sumanta Choudhury, advisor, Pharmaceuticals Export Promotion Council of India (Pharmexcil).
Canada is the 9th largest market for pharmaceuticals in the world in terms of value. India's exports to Canada are valued at USD 354.8 million.
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