BUDGET BUZZ: Bring policy to reduce import of drugs

The Association of Pharmaceutical Producers of Nepal (APPON) was established by Nepali pharmaceutical entrepreneurs 20 years ago with the clear objective of producing quality, safe and effective drugs and to deliver these at affordable prices within the country.
At present, we are a 42-member industries producing quality medicines. The total contribution of the association to the Nepali pharma market is 35 per cent out of the total 42. Around 14 industries have already received AHO-GMP (WHO Standard Good Manufacturing Certificate) Certificate. Till now, we have utilized only 55 per cent of our total capacity.
APPON members never compromise on quality and try their best to improve the quality of all Nepali medicines. APPONs suggests the inclusion of the following points in the budget to come in order to boost the pharma sector and increase its capacity utilisation as well as market strength.
APPON wants to reduce the import of medicines from different countries to protect the 42 industries and their 45 products in which the country is self sufficient through local production. In the meantime, it wants to have easy, favourable registrations of new molecule (new products) for their sustainability and recommends that only innovative companies from the association should get registration of that molecule.
It also wants to participate in and contribute to the preparation and revision of the National Drug Policy. It wants to revise the Drug Manufacturing Code-2041 as per the need of member industries timely.
Similarly, APPON wants to have cut off in VAT of excipients and other packaging materials which are produced and available in the country. The requirement of different stainless steel equipment and accessories is more in Nepali industries. However, there is 40 per cent tax which we have to pay (25 per cent custom and 13 per cent VAT aside from other taxes). This is not justified.
APPON wants that the tax and VAT on research and development and other laboratory equipment, which are imported, should be abolished to facilitate the member industries.
APPON believes that if the government respond positively, it can bolster 50 per cent of the total Nepali pharma market. APPON is eager to work in cooperation with different ministries as well as DDA and other stakeholders. It wants supports from all consumers of Nepali medicines and assures of the quality, safety and efficacy of Nepali medicines -- factor most vital to the people of the country.

Umesh Lal Shrestha
President
Association of Pharmaceutical Producers of Nepal (APPON)

APPON calls for level playing field

Nepali pharmaceuticals producers have urged neighbouring countries for reciprocal treatment to their products. They also complained of lack of effective monitoring of sub-standard products flooding the market.
"If other countries do not let our products enter, then our government should levy the highest tariff -- under the World Trade Orgsanisation (WTO) norms -- on the import of drugs that Nepali manufacturers produce sufficiently in the country," said Pradeep Man Vaidya, immediate past president (IPP) of the Association of Pharmaceuticals Producers of Nepal (APPON) at the association's 15th annual general meeting (AGM) here today.
"The market is flooded with unregistered and sub-standard drugs due to ineffective monitoring of the Department of Drugs Management," he said adding that on one hand Nepali companies are hurt while on the other people are compelled to buy fake products - especially in Tarai - a problem that often has fatal effects.
Every drug sold in the country needs to be registered and certified by the Department of Drugs Management but still the market is flooded with unregistered and sub-standard drugs. "The department lacks manpower and adequate infrascture for effective monitoring," Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and former president of APPON said. "The government also needs to bring a new policy to boost the confidence of pharma producers," he said adding that the present Act was brought one-and-a-half decades ago. "The present Act - brought in 2051 BS - is also a major hurdle in developing the pharma industry," Pandey said.
If the government brings a supportive policy, Nepal can be self-dependent by 2013, Vaidya said, adding, "It will not only produce sufficient pharma products but also start exporting them."
There are currently over 40 pharmaceutical industries that fulfil 35 per cent of the total market demand in Nepal. "In 1970, the pharma industry came into existence but it is only after 1990 that the sector started flourishing," informed said APPON president Umesh Lal Shrestha, who has been re-elected for another term.
Without economic development the country cannot develop, he said adding that like other industries the Rs 7 billion pharma industry is also hurt by long hours of power-outage, fuel shortage, worsening labour problems, frequent bandhs, unstable politics and policy level hurdles."Over a dozen companies are WHO/GMP certified and more are in the process of getting certified which would guarantee the quality of domestic products," Shrestha added. "Apart from that, Nepali drugs are cheaper as well."
"Nepali drugs are of international quality," affirmed health secretary Dr Dirgha Singh Bam adding that unhealthy and unethical competition has marred the Nepali pharma industry. "It is the government's responsibility to protect the national industry and give it priority," he said.
Nepal Medical Association (NMA) president Dr Chop Lal Bhusal supported Dr Bam's stance and urged the government to protect the national industry.
Minister for Industries, Astalaxmi Shakya, assured APPON of the government's support.

New Team
KATHMANDU: The 15th AGM of Association of Pharmaceutical Producers of Nepal (APPON) elected a new executive committee under president Umesh Lal Shrestha. Mahesh Gorkhali is vice-president, whereas Shankar Ghimire is general secretary and Rajendra Kabara is treasurer. Including Immediate Past President Pradeep Man Vaidya the 11-member new executive committee took oath of the office on Friday after the AGM. The APPON was established 19 years ago.

Nepali Pharmaceutical Industry needs medication

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.”