Sudip Chaudhuri
Indian Institute of Management Calcutta, Economics, Department Member
India has one of the most advanced pharmaceutical industries among developing countries. Yet India is critically dependent on China for supplies of bulk drugs and drug intermediates with China accounting for about two-thirds of the total... more
India has one of the most advanced pharmaceutical industries among developing countries. Yet India is critically dependent on China for supplies of bulk drugs and drug intermediates with China accounting for about two-thirds of the total imports. In the early 1990s, China was relatively a minor source of bulk drugs imports for India. Imports increased since then and sharply accelerated after the early 2000s. By the mid-1990s, India was able to successfully develop a pharmaceutical industry. The policies that India pursued till then significantly influenced the transformation. The mid-1990s however saw the beginning of a series of policy changes in India in the pharmaceutical industry. Unlike China where the government intervened strongly, the role of the government was consciously diminished in India. As a result, India became increasingly dependent on bulk drugs supplied from China. India’s critical dependence on China for bulk drug supplies was flagged from time to time in different circles. The government has been slow in responding to the situation but has now announced major schemes for promoting local production of bulk drugs, drug intermediates and key starting materials. These are expected to have a major impact. But the paper argues that these deal with only a part of the problem and suggests the other policy steps that need to be taken.
Access to COVID-19 vaccines have been highly unequal. Compared to almost three-fourths of the people in high income countries, less than one-fourth of the people in low-income countries have been vaccinated with at least one dose.... more
Access to COVID-19 vaccines have been highly unequal. Compared to almost three-fourths of the people in high income countries, less than one-fourth of the people in low-income countries have been vaccinated with at least one dose. Developed countries have mainly relied on the patent-protected vaccines marketed by Pfizer-BioNTech and Moderna and manufactured in their countries. These multinational corporations (MNCs) have refused to give voluntary licences and share technology for manufacturing in developing countries (except in a few cases lately). At the World Trade Organization (WTO), developed countries have resisted attempts to eliminate patent and other intellectual property (IP) barriers that could facilitate manufacturing on a larger scale. The foremost lesson from the COVID-19 pandemic is that developing countries need to stop relying on MNCs and developed country governments and to take proactive steps to be better prepared to deal with pandemics and situations of public health emergencies. While the need to use flexibilities under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement has received wide attention, what is also crucial is developing manufacturing capabilities and capacities in developing countries. COVID-19 pandemic has brought developing countries closer. Developing countries, particularly those with insufficient or no manufacturing capacities have relied a lot on supplies from other developing countries. Again, the vaccines developed in developing countries are being manufactured in a number of countries through technology transfer and other arrangements. There are 92 manufacturers in 28 developing countries for 33 COVID-19 vaccines. The manufacturing and trade links between developing countries need to be further intensified and strengthened. Through appropriate national industrial and technology policies and collaboration among developing countries, an overall improvement in the manufacturing landscape is possible.
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Page 1. Government and Transnationals New Economic Policies since 1991 Sudip Chaudhuri This paper focuses on the direct investment activities of TNCs in the manufacturing sector in India in the context of the new economic policies. ...
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Most developing countries depend on imports for the supply of essential medicines. Many developing countries have been finding it extremely difficult to promote local production. But despite being a Least Developed Country (LDC),... more
Most developing countries depend on imports for the supply of essential medicines. Many developing countries have been finding it extremely difficult to promote local production. But despite being a Least Developed Country (LDC), Bangladesh has succeeded in developing a pharmaceutical industry. The rise of the pharmaceutical industry in Bangladesh is attributed to the Drug Ordinance of 1982. This created a market for the local firms for simple generic formulations which were earlier imported or manufactured by the foreign firms. Local firms grabbed the opportunity and dramatic growth of the industry led by local firms followed. But manufacturing of active pharmaceutical ingredients was neglected. This did not constrain the growth initially with the availability of cheap supplies from India and then China. But this has emerged as a critical bottleneck today. Bangladesh, as an LDC abolished product patent protection in pharmaceuticals in 2008 and what the 1982 Ordinance did for generic products, the change in the patent regime has been doing for patented products. Bangladesh has introduced to the market a number of patented products at very low prices. This is a significant development. But the traditional sources of APIs, viz., India and China cannot officially export patented APIs to Bangladesh unless permitted to do so. Due to the difficulty of sourcing patented APIs, Bangladesh is unable to enjoy the full benefits of the absence of product patent protection. Some steps have been initiated for the growth of the API sector. For the efforts to succeed, the government needs to be more directly involved in developing the technological base of the industry.
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The proposal of Costa Rica to create a voluntary pool mechanism for medical products and technologies for COVID-19 has evoked huge interest and optimism. WHO and Costa Rica have followed it up through a Solidarity Call emphasizing the... more
The proposal of Costa Rica to create a voluntary pool mechanism for medical products and technologies for COVID-19 has evoked huge interest and optimism. WHO and Costa Rica have followed it up through a Solidarity Call emphasizing the need for voluntary licensing on non-exclusive basis to Medicines Patent Pool (MPP). The success of a voluntary pool critically depends on the willingness of the patentees to join the pool. In a public health crisis, boundaries of public policy must not be determined by the patentees. MPP will work much better if the patentees are compelled or induced to join the pool. International cooperation is important in this regard. Highlighting the virtues of voluntary measures and promoting MPP without adequate emphasis on the use of compulsory licensing and other TRIPS flexibilities, actually weakens the MPP. In the light of the experience of MPP, the basic objective of this paper is to analyse to what extent voluntary pool mechanisms can be relied upon to make COVID-19 medical products affordable and accessible. It is important to appreciate the achievements of MPP. But the constraints under which it operates and its limitations must also be kept in mind.
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Cancer is one of the leading causes of illness and death in India and the government rightly acknowledges and stresses the importance of making cancer medicines more affordable. On February 2019, Government has imposed a ceiling of 30%... more
Cancer is one of the leading causes of illness and death in India and the government rightly acknowledges and stresses the importance of making cancer medicines more affordable. On February 2019, Government has imposed a ceiling of 30% trade margins on selected anti-cancer medicines to make these more affordable. The retails price is the sum total of what the manufacturers charge and the trade margins. While putting a cap on the later, the government has kept the former untouched. But manufacturers’ prices have been under price control under the Drug Price Control Order, 2013. This paper analyses how effective has been government measures to control the prices of anti-cancer medicines. The paper finds that despite the attempts to fix ceiling prices and to impose trade margin caps on some anti-cancer medicines, the prices have remained high and unaffordable and prices of the same product sold by different manufacturers vary widely. The lower priced products are not necessarily purchased more and even when the prices of some products have fallen substantially, the overall consumer gain has not been significant. This is attributed to some basic inadequacies and weaknesses of the way prices have been attempted to be controlled in India. The formulations market in India is essentially a branded generics market and suffers from market imperfections. The government has not made any attempt to tackle the imperfections. The paper also discusses the prices of patented products and biologic products which have become more important in recent years. No attempt has been made to control the prices of patented medicines. Other methods of making patented medicines more affordable, for example compulsory licensing has also practically remained unexplored. One of the reasons for the high prices of some of the biologic products is that the regulatory requirements have made it more difficult and costlier to enter the market. The paper stresses the importance of simplification of the regulatory barriers to facilitate entry of firms and make the market more competitive and prices more affordable.
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The world pharmaceutical industry dominated by multinational corporations has neglected research for drugs for diseases of poor countries. Introduction of stronger patent protection in India after World Trade Organization's TRIPS... more
The world pharmaceutical industry dominated by multinational corporations has neglected research for drugs for diseases of poor countries. Introduction of stronger patent protection in India after World Trade Organization's TRIPS agreement has failed to rectify this deficiency despite the substantial increase in R&D activity. In the light of the experience of the Indian private sector and the public-private partnerships initiated in India for the development of new drugs, the paper explores some policy options and suggests the expansion of public-private partnerships to include organisations from other innovative developing countries such as Brazil and China.
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Much analysis of the supply chain for essential medicines to Africa assumes broad sustainability of low-cost generics supply from Indian manufacturers. We use Indian data and interviews to question this assumption. In a case study of... more
Much analysis of the supply chain for essential medicines to Africa assumes broad sustainability of low-cost generics supply from Indian manufacturers. We use Indian data and interviews to question this assumption. In a case study of Tanzania, we then argue for the necessity and feasibility of enhanced local production of essential medicines. We identify key industrial policy interventions, including industrial protection and active government purchasing; public goods including legislative and regulatory frameworks and training; and encouragement and facilitation of joint ventures. We show that a basis has been laid for these activities, and identify the urgency and difficulty of the policy challenge. There are lessons for the Tanzanian case from Indian industrial history, and policy space is provided by Tanzania's Least Developed Country status. Industrial and health policy can be further integrated to the benefit of Tanzania's citizens. The Tanzanian case has broader implications for African policymakers. Des nombreuses e´tudes sur la chaıˆne d 0 approvisionnement de me´dicaments essentiels destine´s a ` l 0 Afrique font l 0hypothè se de la stabilite´de l 0 approvisionnement en me´dicaments ge´ne´riques par les producteurs indiens. A ` partir d 0 une base de donneés indienne et d 0 entretiens, nous testons cette hypothè se. Dans une e´tude de cas concernant la Tanzanie, nous soulignons la ne´cessiteét la fais-abilite´d 0 un renforcement de la production locale de me´dicaments essentiels. Nous identifions des mesures cle´s de politique industrielle, telles que une politique active d'achat par le gouvernement la mise en place desystè mes de protection industrielle, de biens publics – notamment des dispositifs le´gislatifs, re´glementaires et de formation – et des mesures d 0 incitation pour favoriser le de´vel-oppement de co-entreprises. Nous montrons que les fondations pour ces activite´s sont de´jà en place, et soulignons l 0 urgence et la difficulte´de ce de´fi politique. Pour le cas tanzanien, des enseignements peuvent eˆtre tire´s de l 0 histoire industrielle indienne, et le statut de PMA (pays les moins avance´s) de la Tanzanie lui procure certaines marges de manoeuvre. Les politiques industrielles et de sante´peuvent eˆtre davantage inte´greés au be´ne´fice des citoyens tanzaniens. Le cas de la Tanzanie a des implications importantes pour les responsables politiques d'autres pays africains.
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The industrial policy objective of promoting local production of pharmaceuticals for stimulating economic growth is increasingly appreciated by African governments and internationally. However, questions are widely raised by health... more
The industrial policy objective of promoting local production of pharmaceuticals for stimulating economic growth is increasingly appreciated by African governments and internationally. However, questions are widely raised by health policy-makers concerning the ability of Africa-based producers to compete on price with Indian and Chinese imports and, hence, to sustain access to essential medicines for low-income populations. Data are lacking to test this influential critique. This paper uses an innovative methodology to overcome the difficulties of data access within African contexts. The analysis strongly suggests that despite higher costs than Indian producers, pharmaceutical industries in small underdeveloped countries necessarily imply neither higher prices nor unviable production operations. By ensuring sufficient market access for local producers, governments (and by extension Regional Economic Communities) in low-income Africa can promote viable local production without sacrificing the objective of affordability and accessibility.
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For Covid 19 vaccination, India has primarily relied on two private firms. During the second wave of the pandemic, when shortages were reported in some parts of the country, when desperate attempts were made to scale up production, when... more
For Covid 19 vaccination, India has primarily relied on two private firms. During the second wave of the pandemic, when shortages were reported in some parts of the country, when desperate attempts were made to scale up production, when exports were suspended, the absence of the public sector was strongly felt. An obvious question that came up was why India with a long traditional of public sector vaccine manufacturing had to rely on only two private firms. While private vaccine manufacturers in India have made commendable progress in the last few decades, the public sector has lost its dominance and has now become a marginal player. This is not because of any inherent deficiencies of the public sector vaccine sector or lack of capabilities to deliver. The basic problem has been underinvestment and neglect by government. Particularly in situations where mass vaccination is required, it is critically important to ensure uninterrupted supplies of vaccines at affordable prices. To minimize the uncertainty associated with private sector investments, production and pricing, presence of a strong public sector is crucial. The government has aided the growth of the private sector in India. Similarly with proper investments and support and a reorientation of official policies and attitudes, it is possible to revive and make the public sector a significant player.
The TRIPS agreement has been one of the most contentious agreements of WTO. The pharmaceutical industry has been central to this debate, especially the case of India, which did not recognize product patents in pharmaceuticals before TRIPS... more
The TRIPS agreement has been one of the most contentious agreements of WTO. The pharmaceutical industry has been central to this debate, especially the case of India, which did not recognize product patents in pharmaceuticals before TRIPS and evolved as a major pharmaceuticals manufacturer and exporter. During the AIDS pandemic when patented products were exorbitantly priced, supply of low-priced drugs from India dramatically made medicines affordable and accessible. After the re-introduction of product patent protection in pharmaceuticals in India in line with the TRIPS agreement, considerable speculation and controversy have surrounded the potential impact. Rather than speculation, this paper examines a comprehensive database covering all the products in the market. We contest the claims that there would be, and there has been little negative impact of TRIPs. Our study shows that firms have started selling products at high and unaffordable prices particularly in some therapeutic groups such as cancer. Cancer is not yet a pandemic like AIDS but it is now recognized as one of the greatest public health challenges globally. Our study highlights the gravity of the situation with several cancer medicines much more expensive than the annual cost of US$ 10,000 per person for HIV/AIDs medicines which led to an international outcry in the early 2000s. Another important finding is that prices are high not only because of legal patent barriers to entry of generics but also because of manufacturing and regulatory barriers especially in biologic products. This has implications for policy intervention to make medicines more affordable for universal healthcare. What is important is not only that flexibilities such as compulsory licensing and price control which TRIPS permits are utilized but also that regulatory barriers are simplified as in the case of biologics.