The National Drug Policy 1995 has directed all the government ministries ‘to include drug industry as a priority sector’. But even after a decade, domestic industries feel that they are not getting enough attention from the government.
“In practice, government policy favours imports,” complained Umesh Lal Shrestha, managing director of the Quest Pharmaceuticals. “Both the Drug policy 1995 and Ausadhi Utpadan Samhita 2041 are outdated. They need to be updated and made supportive to the domestic pharma industry.”
In 1990, when the National Drug Policy was formulated, there were only a few pharmaceutical industries in Nepal. But at present there are more than three-dozen domestic pharma industries that are operational. It is not strange that they want more government support today.
“Nepal needs to treat imported medicines in a similar fashion as Nepali pharmaceutical exports receive in neighbouring countries”, is the general demand from the domestic players.
“While Nepal charges $1,500 as inspection charge from a company from SAARC, India, for example, charges $5,000. For a product registration, while Nepal charges $10, India charges $150. This clearly shows that Indian domestic companies have a greater protection,” Shrestha informed.
"We want our government to lobby for us, like it does for garment sector," said P J Pandey, managing director of Lomas Pharmaceuticals. “We want to take advantage of being a Least Developed Country and sell our products abroad,” he said adding that the government needs to start economic diplomacy to promote the domestic pharma industry abroad.
"With modern technology in place, the Nepali pharmaceutical sector is capable in producing quality drugs. We can export and compete with others, if the government gives us a little support," Pandey added.
One of the major objectives of the National Drug Policy-1995 was to enable the local pharma industry to ‘to produce 80 per cent of the essential drug formulations in the coming ten years’.
“However after ten years, we have achieved only 45 per cent of the total target,” said, Bhupendra Bahadur Thapa, director general at the Department of Drug Administration (DDA). “But we are moving in the right direction,” he added.
“It is possible, if all the domestic companies start producing at least one essential and one life-saving drug,” said Suresh Prasad Pradhan, president of Nepal Chemist and Druggist Association (NCDA).
With an annual projected growth rate of around 19 per cent, pharmaceutical sector is probably one of the fastest growing industries in Nepal.
The domestic sector at present claims a-three billion rupees worth of market, which is around 35 per cent of the total eight billion rupees pharmaceutical market in Nepal.
Foreign companies occupy almost 65 per cent of the drug market. Even among the foreign brands, Indian companies are dominant.
The other problems besetting the Nepali pharmaceutical sector are VAT and smuggling of drugs through the porous Indo-Nepal border.
According to Shrestha, "There should be no VAT on raw materials, packaging material and machines.”
APPON and NCDA both raise concerns over VAT and extra taxes like 1.5 per cent security tax levied on raw materials.
Besides these, issues like too many players and lingering doubts over the quality of the medicines produced, are headaches that the pharmaceutical sector here is still carrying.
Today, there are 40 Nepali companies. Alongwith the 201 foreign companies, they are offering 7,299 brands now.
The debate whether the existence of this large number of pharmaceutical companies is good for Nepal or not continues.
Unlike other products where more brands usually mean more choice for consumers, the large number of brands in the pharmaceutical sector is only encouraging unhealthy practice, feel most industry insiders.
"It is not like noodles that a consumer chooses as which product to eat. Rather, it is prescribed by an expert and a consumer has no choice," said Sarad Chandra Ojha of Sumy Pharmaceuticals.
"We are working on reducing the number of brands to control unhealthy practices," Bhupendra Bahadur Thapa, director general at the DDA said, adding that the practice of giving incentives is unethical in pharma business. “We have been working with APPON and NCDA to control this unhealthy practice.”
Rajesh Shakya, director of the Florid Laboratories, however, does not agree, "More brands mean no harm. But quality should be maintained, a matter that government should continuously monitor.”
“Some foreign companies, which were inspected long time back need re-inspection as it is a matter of life and death to people,” said Shrestha. Pradhan also agreed that the quality control is a must.
“Government should have a well-equipped body for quality control. The quality is tested once when a foreign company registers its products. Further checking is done every year or on specific complaints. This practise should be discouraged,” Shrestha said. “Medicines entering Nepal should be regularly tested at the customs points by the authorities.”