From UPSC perspective, the following things are important :
Prelims level : Not much.
Mains level : Paper 3- Incentive package to promote the API production in India.
It is most welcome that the Centre has announced a `14,000-crore incentive package to boost the manufacture of drugs, especially active pharmaceutical ingredients (API).
What should be the immediate policy focus?
- Focus on protective gear: The immediate policy focus must be to swiftly overcome shortages of critical protective gear like gowns and face masks, diverting production lines if required.
- We also need to anticipate and step-up production of vital devices like ventilators.
- Provisions in the package: What is proposed now are industrial parks for bulk drugs and APIs, together with a policy for multi-year fiscal benefits. And ditto for parks for the manufacture of medical devices and attendant fiscal incentives.
- The state governments need to identify 1,000 acres for the parks that are well-integrated with knowledge centres and nationally accredited labs.
What additions need to be made in the package?
- Public-private partnership: In tandem, the pharmaceuticals package issued on Saturday needs to be followed through, with a forward-looking public-private partnership, to avoid import-dependency in this critical sector.
- What is envisaged is a set of schemes to reap economies of scale and ready availability of inputs in the production of APIs and medical devices via the cluster approach.
How India became uncompetitive in API?
- Policy rigidities and price controls: APIs are, of course, bulk drugs that provide medicines with their therapeutic value, and it is unfortunate that since circa 1995, India has become steadily uncompetitive in API production, thanks to a panoply of policy rigidities such as onerous price controls.
- Export competition from China: Opaque export competition from China has been game-changing indeed: APIs for most medicines are mostly imported.
- This needs to change, fast. We do need to competitively and efficiently boost output of pharmaceuticals right across the value chain.
The government must understand that manufacture by itself is not enough. The policy must ensure competition and quality, keep prices down.