Overview Of The Indian Pharmaceutical Industry Economics Essay

Indian pharmaceutical Industry The pharmaceutic pains in India is among the approximately extremely organized areas. This intentness plays an of import function in advancing and prolonging development in the field of terrestrial aesculapian specialty. Due to the heraldic bearing of low apostrophize fabrication inst ideallyations, enlightened and skilled work shove and in high-priced testing groundour force among others, the fabrication is set to scale vernal highs in the Fieldss of production, development, fabrication and query. In 2008, the interior(prenominal) medicate ac keep bon ton market in India was anticipate to be US $ 10.76 cardinal and this is a want(p)ly to maturation at a compound unity-year growing rate of 9.9 per penny until 2010 and later at 9.5 per cent boulder clay the twelvemonth 2015.Industry Tendenciesa?The medicate companionship labor by and large grows at almost 1.5-1.6 times the Gross house servant Product growinga?Glob exclus ivelyy, India ranks 3rd in footings of fabricating do doses attach to deals by volumea?The Indian pharmaceutical exertion is pass judgment to turn at a rate of 9.9 % boulder clay 2010 and later that 9.5 % boulder clay 2015a?In 2007-08, India exported drugs deserving US $ 7.2 billion in to the US and Europe followed by Central and Eastern Europe, Africa and Latin Americaa?The Indian vaccinum market which was deserving US $ 665 million in 2007-08 is turning at a rate of much(prenominal) than 20 %a?The retail pharmaceutical market in India is pass judgment to traverse US $ 12-13 billion by 2012a?The Indian drug and pharmaceuticals section received foreign direct investing to the melody of US $ 1.43 billion from April 2000 to December 2008ChallengesEvery industriousness has its ain sets of advantages and disadvantages at a lower place which they fo to a lower place to work the pharmaceutical intentness is no exclusion to this. Some of the altercates the pains faces argon a?Regulatory obstructionsa?Lack of proper tusha?Lack of qualified professionalsa?Expensive research equipmentsa?Lack of academic coactiona?Underdeveloped molecular come plana?Divide between the industry and survey wrinkle of reputation medicate community Companies in IndiaDishman pharmaceuticals, Elder pharmaceutical companyceuticals, J B Pharmaceuticals, Tor film Pharmaceuticals, Sun Pharmaceuticals, Ranbaxy India, Cadila Pharmaceutical Limited, Wockhardt, Strides Arcolab, IPCA Laboratories, Alembic, Amrutanjan, Virchow Laboratories, Polydrug, Laboratories, Dr. Reddy s Laboratories, Aurobindo Pharma, Jubilant Organosys, Astrazeneca Pharma,Divis Laboratories, Merck Ltd. , Astrazen Pharma, , Abbott India, Aventis Pharma Limited, Glenmark, Pharmaceutical Ltd. , Clarion Drugs, Blue Cross Laboratories, Intas Pharmaceuticals Limited, Lincoln Pharmaceuticals Ltd, Matrix Laboratories regimen EnterprisesThe government of India has under interpreted several(prenominal) including poli cy enterprises and gross sweetening interruptions for the growing of the pharmaceutical match in India. Some of the steps adopted atomic number 18a?Pharmaceutical units are eligible for leaden gross sweetener decrease at one hundred fifty % for the research and development expense obtained.a?Two revolutionary strategies viz. , unsanded Millennium Indian Technology Leadership opening night and the Drugs and Pharmaceuticals Research Program eat up on been launched by the presidency.a?The giving medication is contemplating the original activity of SRV or peculiar(prenominal) purpose vehicles with an insurance screen to be used for funding wise drug researcha?The dep artment of Pharmaceuticals is chew overing the creative activity of drug research installations which batch be used by one-on-one companies for research work on rentPharma ExportIn the recent one-time(a) ages, despite the cast away witnessed in the wandering economic system, exports from the pharmaceuti cal industry in India cast shown good perkiness in growing. Export has become an of import dig force for growing in this industry with much than 50 % flagrant coming from the abroad markets. For the fiscal twelvemonth 2008-09 the export of drugs is estimated to be $ 8.25 billion as per the Pharmaceutical Export Council of India, which is an organisation, set up by the Government of India. A study under comen by FICCI, the oldest industry chamber in India has predicted 16 % growing in the export of India s pharmaceutical growing during 2009-2010. anchor participants in Indian Pharmaceutical Industry on that point are several national and international pharmaceutical companies that operate in India. Most of the asseverate s supplicates for pharmaceutical swops are met by these companies. Some of them are shortly described belowa?Ranbaxy Labs Limited is the biggest pharmaceutical fabrication company in India. The company is ranked at the 8th address among the planetary generic pharmaceutical companies and has presence in 48 states including existence menage fabrication installations in 10 states and serves to clients from over 125 states. Ranbaxy Laboratories 2009-2010 Q3 dismiss Net income Results showed a net income of Rs 116.6 crore as compared to Rs 394.5 crore shortage, recorded during the corresponding period stretch out financial.a?Dr. Reddy s Laboratories industries and markets a broad scope of pharmaceuticals both in India and abroad. The company has 60 diligent pharmaceutical ingredients to fabricate drugs, critical anxiety merchandises, diagnostic kits and biotechnology merchandises. The company has 6 FDA workss that produce active drug company ingredients and 7 FDA inspected and ISO 9001 and ISO 14001 certified workss. Dr. Reddy s Q1 FY10 consequence shows the unwasheds of the company at Rs. 18,189 million which is up by 21 % . During this one-fourth the company introduced 24 new generic merchandises, applied for 22 new generic merchan dise enrollments and filed 4 DMFs.a?Cipla is an Indian pharmaceutical company renowned for the industry of low bell anti AIDS drugs. The company s merchandise scope comprises of vermifuges, oncology, anti-bacterials, cardiovascular drugs, antibiotics, nutritionary addendums, anti-ulcerants, anti-asthmatics and corticoids. Cipla in any event offers other services like calibre control, technology, undertaking assessment, works supply, consulting, commissioning and know-how transportation, support. For the fiscal twelvemonth 2008-09 the company registered an attachment of 22 % in gross tax incomes and other income over the old twelvemonth.a?Nicholas Piramal is the 2nd largest pharmaceutical health care company in India. The trade names manufactured by the company include Gardenal, Ismo, Stemetil, Re trade uniont, Supradyn, Phensedyl and Haemaccel. Nicholas Piramal has entered into join ventures and confederations with several international corporations like Cheissi, Italy IVAX Corp UK, F. Hoffmann-La Roche Ltd. , Allergan Inc. , USA etc.a?Glaxo Smithkline ( GSK ) is a United Kingdom based pharma company it is the universe s 2nd largest pharmaceutical company. The company s portfolio of drug company merchandises consist of cardinal nervous system, respiratory, oncology, vaccinums, anti-infectives and gastro-intestinal/metabolic merchandises among others. On November 2009, the FDA had announced that the H1N1 vaccinum manufactured by GSK would fall in the disceptation of the four vaccinums approved.a?Zydus Cadila overly known as Cadila Healthcare is an Indian pharmaceutical company located in Gujarat. The company s 1QFY2010 consequences show the net gross grosss at Rs880.3cr which is high than the estimated Rs773cr. The net net income was Rs124.8cr which was addition of 39 % the addition was on history of higher gross tax incomes and betterment in the OPM.India s Domestic Pharmaceutical Market ( 12 Months Ended January 2009 )Company surface ( $ Billion ) Market Share ( % ) Growth Rate ( % )Entire Pharma Market 6.9 100.0 9.9Cipla.36 5.3 13.4Ranbaxy.34 5.0 11.5Glaxo Smithkline.29 4.3 -1.2Piramal Healthcare.27 3.9 11.7Zydus Cadila.24 3.6 6.8Beginning ORG IMSFuture ScenarioWith several companies slated to do investings in India, the after living scenario of the pharmaceutical industry in curb to its pretty promising. The state s pharmaceutical industry has enormous potency of growing sing all the undertakings that are in the grapevine. Some of the future enterprises area?According to a survey by FICCI-Ernst & A Young India provide open a likely US $ 8 billion market for MNCs exchange expensive drugs by 2015a?The survey likewise says that the municipal drug company market is likely to make US $ 20 billion by 2015a?The pastor of Commerce estimations that US $ 6.31 billion ordain be invested in the domestic pharmaceutical sectora?Public crush on health care is likely to raise from 7 per cent of GDP in 2007 to 13 per cent of GD P by 2015a?Dr Reddy s Laboratories has tied up with GlaxoSmithKline to develop and market generics and preparations in forthcoming markets overseasa?Lupin, a Mumbai based pharmaceutical company is flavor to tap chances of just about US $ 200 million in the US unwritten preventives marketa?Due to the low cost of R & A D, the Indian pharmaceutical off-shoring industry is designated to turn out to be a US $ 2.5 billion chance by 2012Expectation From compute 2010- Health & A Pharmaceutical IndustryFebruary 24, 2010- cypher intelligence on cipher outlooks by wellness sector of IndiaThe Finance Minister of India is yet two yearss off from 26th February, 2010 when he bequeath show the marriage Budget 2010-11. This is a really of import fiscal papers for all the sectors of India as it will risk how the public presentation of diverse industries is to be financially and otherwise supported by the Government of India. In the budgets of ultimo old ages, high allotments had been ma ke to the flagship programmes of the administration that includes national wellness excessively among others. The wellness industry that includes natural wellnesssector either snatch good as pharmaceutical industry of India has high budget outlooks from the uniting Budget 10-11 as it hopes for proclamations of believable stairss to be taken to better the fibre of public outgo on wellness sector. Issues such as wellness, human immunodeficiency virus AIDS, poorness relief, sanitation undertakings, H2O planning and development undertakings, should go on to stay high precedence points on the budget for improved supports and boilers suit development.a?Currently the wellness related in-house R & A D disbursals enjoy one hundred fifty % leaden evaluate taxation write-off that should be broad to disbursals on outsourced surveies such as clinical tests and precise research lab surveies. Besides the leaden tax write-off should be raised from 150 % to 200 % .a?On lines of the dev eloped economic systems, the cause of research tax income sweetener credits to countervail future gross enhancement liability should be introduced.a?State excise state on certain preparations should be brought polish from the present 16 % to 8 % .a?Allocation for the National Rural Health Mission should be change magnitude well.a?Excise responsibilities should non be applicable to all indispensable drugs.a? evaluate liberty for export oriented units should be drawn-out and the place of new direct revenue enhancement codification on particular economic zones should be made clear.a?Healthcare installations like medical specialties and life salvaging drugs, trained medical forces and physicians, installations for diagnosing of of import diseases and complaints should be extended to the bucolic India on a precedence footing.a?The wellness industry has many outlooks from Budget 2010 sing subsidies and revenue enhancement inducements on assorted indispensable merchandises such a s life salvaging drugs, equipments for diagnostic intents etc.a? revenue freedoms should be given to bing infirmaries and wellness establishments so that much and more infirmaries and wellness establishments in rural countries notify be established.a? retention in position the long gestation period, the revenue enhancement spend provided to infirmaries set-up in rural countries should be extended from 5 old ages to 10 old ages.a?The ordinances such as transportation pricing, imposts rating and drug pricing that are like acrimonious experiences for the pharmaceutical companies should be rationalized along with early nidation of call down pricing understandings and safe seaport regulations.a?Pharmaceutical companies should be allowed for birdcall of outgo on a ego enfranchisement footing or on specified paperss such as CA certificate so that conformity of the jurisprudence is done in hassle free mode.a?In mold to cut down the overall cost of interpellation of patients, the lis t of life salvaging drugs eligible for imposts certificate of indebtedness freedoms should be extended and the responsibleness on medical devices should be reduced.a? care for Added Tax ( VAT ) on medical specialties should be rationalized across provinces with specific freedom of life salvaging drugs and life salvaging medical equipment.a?Drug makers who are non into exports face the issue of accretion of Cenvat reference in the books delinquent to the difference in the responsibility construction of APIs and FDFs. Measures should be taken for this as at that place are no commissariats to retrieve the accumulated Cenvat recognition, which in the end becomes a cost to such makers.Budget 2010 Expectations of drug company industryHitesh SharmaThe die hard budget creation impersonal, the Indian pharmaceutical industry has drawn its unfinished set with the hope that Budget 2010 would turn out to be a compensate for the industry. Industry believes that its longinging list has a virtue for consideration in this budget as some of these points gain non been surmount in the same at hand statute laws.Research revenue enhancement creditsDrying grapevine of new drugs, increased R & A D outgo and increased force per unit landing field in the developed states to necessitate the wellness financial aid costs down has compelled MNCs to offshore R & A D farther. art object India is perceived as an attractive finish to outsource R & A D work due to its low cost and high fiber capablenesss, to set India in a prima place, there is a demand to supply drift to such activities in the signifier of revenue enhancement and financial benefits. While presently, weighted revenue enhancement benefit is usable for in-house R & A D, there are no specific benefits operational to units engaged in the concern of R & A D. In this respect, the Government force out play its function by supplying benefits to units engaged in the concern of R & A D by manner of tax wr ite-off from net incomes linked to investings. Further, benefits in the signifier of research revenue enhancement credits, which can be used to countervail future revenue enhancement liability, similar to those given in developed economic systems can besides be considered.Include disbursals related to research done removed R & A D labThe Indian drug company infinite has witnessed multiple advanced moves that have strengthened their ability to do it large in the discovery/R & A D infinite. These Indian companies incur ample outgo on abroad tests, readyings of dossiers, consulting/ juristic fees for NCE ( New Chemicals Entities ) and ANDA ( Abbreviated New Drug Applications ) filings with the US FDA. Besides there is a important nerve center of legal costs incurred in supporting the ostensibles and merchandises. While presently, leaden tax write-off is available for outgo on in-house R & A D installation, the commissariats do non stipulate that the outgo incurred outside the R & A D units are eligible for leaden tax write-off. Consequently, industry organic structures have sought the inclusion of outgo minor expense to research carried outside R & A D installation in India or in any foreign state, within the scope of leaden tax write-off.Extend revenue enhancement vacation to infirmaries beyond rural countriesThe quality and low cost advantage has boosted the medical touristry in India. Industry study suggests that about 150,000 medical tourer visit India every twelvemonth. Further, medical touristry to India is expected to convey gross of $ 2 billion by 2012. In order to capitalize on the chance and to beef up the place of India as a low cost wellness attention tourer finish, there is a greater demand to set-up more and more province of the art wellness attention installations. Even otherwise, there is a clear typesetters case of augmenting wellness attention system in India. Given that big fragment of investing would necessitate to be contributed by private sector, the Government can play its function by supplying financial benefits and widening the bing revenue enhancement vacation to infirmaries set up beyond the rural countries.Subsidy for rural health care substructureSpecifically with respect to rural and semi-urban countries, several companies have taken the enterprise to construct the supply concatenation substructure and develop specific merchandises these stairss are non easy and carry immense investings. To advance the development of these countries and have better entree to healthcare installations, the Government, in add-on to its ain plans, should choke up the private sector every oddball good this could be in the signifier of subsidy, sharing substructure with private sector, revenue enhancement inducements and so on.Rationalise appraisal processAs per the industry pattern, Pharma companies reach out to patients finished physicians by supplying free samples of drugs to physicians and incur other promotional outgo on seminars and so on for instruction of physicians. This creates consciousness about the drugs and lastly helps in hiking the gross revenues of the companies. During the class of assessment exertions, the gross governments frequently challenge the promotional information and ask for voluminous paperss which are cumbersome to supply. They besides frequently deny revenue enhancement tax write-off on an ad-hoc footing. In this respect, the Government can apologize the commissariats by supplying for claim of outgo on a self enfranchisement footing or on the footing of specified paperss such as CA proof and so on.Harmonize pricing ordinancesTransportation pricing is another country necessitating particular care for pharmaceuticals industry. While transportation pricing ordinances expect companies covering in active pharmaceuticals ingredients ( APIs ) /finished drug preparations ( FDFs ) import from related parties to keep higher borders, Drugs Prices Control Order ( DPCO ) pla ces limitations on the terminal merchandising pecuniary judge. evenly customs ordinances create a rearward force per unit area by seeking to look into any undervaluation of imported APIs/ FDFs. thither is a clear instance to being in harmoniousness in transportation pricing, imposts and DPCO ordinances. Other issues which pharma companies face is comparing of monetary determine of innovator/ research oriented companies with generic companies without taking awareness of quality and efficaciousness. This causes important adversity for pioneers companies who spend important costs on research. There is an immediate demand to turn to these issues every bit good. Besides, succession it is proposed that Advance Pricing Agreements ( APAs ) and safe seaport regulations would be introduced, it needs to be expedited.Extend list of life salvaging drugsOn the indirect revenue enhancement forepart, the Government can look at widening the list of life salvaging drugs, which are eligible for im posts job freedoms in India. This will take to handiness of life salvaging drugs to the patients at lessen monetary values and conveyance down the cost of intervention for these complaints. Further, it could besides see cut downing the responsibility on medical devices which would take to overall decrease in the cost of intervention of patients. Besides, Government could see cut downing basal usage responsibility for preparations to five per centum in line with the Chelliah Committee s long-run financial policy recommendation.Rationalise responsibility constructionThe levy of excise responsibility on API at eight per centum and on end product of four per centum has led to accretion of Cenvat recognition in the books of makers, particularly those who are non engaged in exports and cater merely to the domestic market. Further, there are no commissariats to retrieve the accumulated Cenvat recognition, which becomes a cost to such pharma makers. The Government could see rationalizin g the responsibility construction by doing it at par with responsibility on concluding end product. other demand has been to increase the abatement bound allowed for calculation of excise responsibility on medicines, from 35 to 45 per centum. Further, industry has sought rationalization of Value Added Tax ( VAT ) on medical specialties across provinces with specific freedom of life salvaging drugs and life salvaging medical devices.In a nutshell, while the planetary developments have led to exciting chances for Indian drug company industry, it is one time once more in hunt of support from the Government to tap the same. On the other manus, the Government is doing advancement in conveying two major revenue enhancement reforms, ie direct revenue enhancement codification, and goods and services revenue enhancement they carry an implicit in docket of conveying revenue enhancement reforms, simplification of processs and minimization of revenue enhancement inducements. Given that the Go vernment intends to implement these statute laws in the near(a) hereafter, it appears that it may non convey in any major alterations in this budget. nub budget2010-2011Budget 2010 Hits & A girls for Pharmaceutical industryExcise responsibility on goods covered under the Medicinal and Toiletries Preparation Act, 1955 ( MTPA applicable to medical specialties and mess articless holdingintoxicant content ) is reduced from 16 to 10 per centum to convey it at par with standard CENVAT rate. The rate of suspension on covered lavatory readyings has besides been revised from 40 to 35 per centum. Further, the jurisprudence is being amended to supply that the Maximum Retail Price ( MRP ) less applicable suspension would be considered for bear downing Countervailing responsibility ( CVD ) for covered imported goods.There has been rationalization in the import responsibility rate construction for the medical devices section, whereby multiplicity of rates have been done off with and the basi c imposts responsibility rate has been reduced to 5 from 7.5 per centum. The levy of Particular CVD 4 % has besides been withdrawn, whereas in certain specific instances, such as life salvaging medical equipments ( non imported for personal usage ) , available freedoms have been withdrawn. However, on an overall footing, this move is likely to cut down the cost of intervention for patients and hike medical devices industry.The budget proposal exempts import of pre-packaged goods intended for retail sale, which are covered by MRP commissariats of Standard of Weights and Measures Act or under any other jurisprudence from levy of SACD. This is likely to tinge bargainers importing finished dose preparations in pre-packaged signifier for retail sale.The Finance Minister has widened the cyberspace of nonexempt services to include wellness look into up undertaken by infirmaries or medical constitutions for the employees of concern entities and wellness services provided under wellness i nsurance strategy offered by insurance companies Service revenue enhancement would use to said services, merely if, the payment are made straight by the concern entity or the insurance company come to to the infirmary or medical constitution. Another new levy proposes to cover services provided for care of medical records of employees of a concern entity.Interestingly, the industry wish list still mostly remains ignored, exceeding the list are rationalization of upside-down responsibility rate construction for preparations, imposts duty freedom for all life salvaging drugs, rationalization of transportation pricing ordinances and so on. Clearly, a batch yet remains to be done for the life scientific disciplines industry.2010 impact Drug companyBelow is an analysis on Budget 2010 with mention to the drug company sector.Increased leaden norm of R & A D tax write-off to 200 %Addition in R & A D tax write-off positive for all R & A D pharmaceutical companiesExcise responsibility or ganise remain unchangedUnion Budget 2010 Drug company industry welcomes revenue enhancement inducements for R & A DNew DELHI Tax inducements given by the Budget for research and development made the Indian pharmaceutical houses sport a smiling but they are leftfieldinquiring if the hiking in excise responsibility to 10 per cent on all non-petroleum merchandises will be applicable to them.Finance Minister Pranab Mukherjee proposed a leaden revenue enhancement tax write-off on outgo incurred in in-house research and development activities to 200 per cent from the online 150 per cent in the Budget. We welcome the governance s move to increase leaden revenue enhancement tax write-off to 200 per cent as research and development activities is a must and in drug company sector, where it is most desperately required, Indian Drug Manufacturers Association executive director Director Gajanan Wakankar said.However, deficiency of lucidity on whether the drug company sector would besides b e covered under the increased excise on all non-petroleum merchandises from 8-10 per cent, held hind end the sector from observing.Presently, the drug company sector attracts 4 per cent excise responsibility after CENVAT was cut by 4 per cent in December 2008 as portion of a foreplay bundle. We are waiting for more lucidity over the issue and so merely we will measure the impact, Pharmaceutical exports council ( Pharmaexcil ) laminitis Chairman D B Mody said.Piramal Healthcare Director Swati Piramal besides said, We are still looking at the ( Budget ) documents. She, nevertheless said the revenue enhancement inducements on R & A D was long overdue.ADrug company Benefit from hiking in revenue enhancement tax write-off on in-house R & A D offset by addition in MAT rateOverall impact of the Union Budget 2010-11 on the pharmaceuticals sector is impersonal. The hiking in leaden revenue enhancement tax write-off on in-house R & A D outgo ( from 150 % to 200 % ) is expected to be ma rginally tender for pharmaceutical companies concentrating on new drug find such as Piramal Lifesciences, Sun Pharma Advanced Research Company, etc, said the taking recognition evaluation bureau Crisil.The addition in Minimum Alternate Tax ( MAT ) rate from 15 % to 18 % will hold a marginally negative impact for most of the pharmaceutical participants. Pharma participants will non be impacted by the addition in excise responsibility on majority drugs as the same is MODVATable.Adept Talk How drug companies can utilize tax write-off as add-on atomic number 90 March 4, 2010 0706 autopsy PSTPharmaceutical companies got a much sought-after wish granted when FM Pranab Mukherjee said in his Budget address for 2010-11 that companies move on in-house research and development will be taxed less.Drug shapers can subtract duplicate the sum they spend on in-house research while calculating their nonexempt income for the assessment twelvemonth 2011-12 onwards, up from the present tax write-off of one and a half times the research spend.The inducement for disbursement more money in research is welcome, but the demand for new drugs needs aggressively higher investings by the public and private sectors and a alteration in focal point from low-value imitator versions of MNC drugs to new therapies.Harmonizing to official estimations, the top 25 pharmaceutical companies in India spent about 6-7 % of their entire gross revenues on research and development in the last financial compared to the planetary norm of 12-15 % .That worked out to a paltry Rs 3,500 crore by 25 Indian companies in an industry with a turnover of Rs 90,000 crore including exports.The entire R & A D spend by the domestic industry is less than 1 % of the $ 130 billion spent globally on drug research. Experts say that unless Indian drug shapers spend more than 15 % of their gross revenues on research, they can non hold a noticeable presence in the universe of sophisticated, high-value, new drugs.One interesti ng facet is that the current research spend is chiefly for happening new methods for doing transcripts of expensive and megahit MNC drugs without conflicting their patents so that the transcripts can be sold in markets like the US to do windfall additions.The US allows a six-month sole selling right to the first generic transcript that enters the market without conflicting the patent protecting the original drug or by turn sashay that the patent was invalid. This path involves judicial proceeding with the pioneer and entails immense legal costs.The history of patent challenges by Indian companies is dotted with a a couple of(prenominal) dramatic successes and a figure of failures. The interesting portion is that the judicial proceeding cost is shown as research and development outgo by most of the Indian companies.Until Indian companies focus every bit or more on contriving their ain new drugs, Indian drug company industry can non lift in planetary stature as a manufacturer of new drugs. The present focal point on generics or imitator drugs gets reflected in statistics. Despite being the 3rd largest manufacturer of drugs by volume, Indian drug company industry stands 17th by the value of its end product because of the low-priced nature of the merchandises.Companies have echt movement for non being able to pass on research every bit much as their planetary opposite numbers. They are smaller in size and about a 4th of the market is under monetary value control.Many Indian drug shapers are researching the possibility of acquiring licenses from the drug discoverer to do an authorized generic version which will hit the market when the original drug s patent expires. The strategy is to fall in the rival if one can non crush him.The government is besides non able to apportion the big sums required for drug find from its revenue enhancement grosss or regular adoptions. The aid that the section of scientific discipline and engineering provides by manner of non-rep ayable grants and soft loans for research is besides non sufficient.Therefore, the authorities needs to happen advanced support theoretical cards to back up new drug research. For illustration, it could present a theoretical account which mobilises financess from investors who are willing to portion the lucks of the high-risk-high-reward game of drug research and funnel shape it to companies with promising experimental new drugs.Recently, the Planning Commission gave the green bespeak to the section of pharmaceuticals to set about a elaborate undertaking study on planing such a theoretical account.The section s thinking is to inquire bureaus like UTI Asset Management Company to raise financess through tax-exempt bonds. The financess therefore raised will be used to construct establishments, train people and discover drugs. If the research leads to discovery of blockbuster drugs, it will profit investors, the company and the concluding consumer.Even if it fails, the authorities wi ll secure a minimal return on investings. It is estimated that merely one in six experimental drugs makes it to the market. Public-funded research will besides let the authorities to exert a say in the monetary value at which the concluding merchandise would be made available to the consumer. It might take several months before the finer inside informations are worked out.The FM s gesture of heightening the revenue enhancement sop for research, despite reproving judgment that the leaden tax write-off strategy is prone to mistreat, shows the authorities s committedness to advance new drug research. But much more public and private resources are needed to take the Indian industry to where the policymakers want to take it-the beginning of one in every ten new drugs invented.