Pharma Industry Upset With Govt’s Hike In Fee For Drug Licenses, But Welcomes Import Duty Hike

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Pharma industry across India including those under the banner of the Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) are now in the dock with the recent notification from the ministry of health and family welfare on the revision in the drug license fee and related levies.

While the sector feels justified on the hike in import duty rates as it supports domestic manufacturers, they are taken aback with a steep rise of fee for new drug clinical trials as it mars innovation and novel drug development specially by SMEs and Start ups.

The revision in licence fee was made in consultation with the Drugs Technical Advisory Board and is already enforced. The Form 10 fees for additional product fees as per Drugs and Cosmetics Rules, 1945, in rule 24,-(a) in sub-rule (1), was Rs. 1,000 with an additional product fee at the rate of Rs. 100. But now the revised version is Rs. 10,000 and an additional product fee at the rate of Rs. 1000. In sub-rule (3), which earlier license fee of Rs. 250 is now Rs.1,500.

In rule 24A, (a) in sub-rule (3), which refers to the registration certificate (site) the earlier fee of US$ 1,500 is now substituted as US$ 10,000. In clause (ii) the fee for additional product license fee is revised from US$ 1,000 to US$ 5,000.

“This is despite our suggestions made in response to the draft notification. We are disappointed that the government has not taken note of our suggestions that at least SME’s be exempted from the proposed hike but has gone ahead with the draft notification as final making no changes. The government should have considered the paying capacity of the small and medium enterprises(SMEs) in the pharma sector,” Harish K Jain, Secretary, Karnataka Drugs and Pharmaceutical Manufacturers Association told Pharmabiz.

The rise in fee for import of drugs is acceptable because such a steep escalation from US$ 1,000 to US$ 5,000 would deter companies to source it from abroad and work towards local manufacture. Even the registration fee for the site US$ 1,500 to US$ 10,000 will now protect the domestic active pharmaceutical ingredient (API) and formulation manufacturers, Jain pointed.

The fee hike for clinical trial of new drugs from Rs. 50,000 to Rs. 2.5 lakh and for approved drugs in India which has increased from Rs. 15,000 to Rs. 1 lakh is too steep. There have already been several barriers for new drug launches by SMEs. On the one hand, patents and the recent increase in cost of conducting clinical trials and bio-equivalence studies de-motivate the sector and on the other hand, the Drugs Control General of India increased the fee by Rs. 2 lakh for new drug trials which is a 400 per cent increase. This is deterrent for not just SMEs but the start-ups known for innovative product development. More over even if a company goes through paying all this, it is unsure if the product will be successful in the market. This clearly indicates that there is no incentive for innovation., said Jain.

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