[ad_1]
NEW DELHI: India is holding high-level talks with the United Arab Emirates to work out a solution to the Gulf state’s pricing norms, which have been a hindrance to exports of generic drugs and vaccines from India, two sources familiar with the matter said.
NEW DELHI: India is holding high-level talks with the United Arab Emirates to work out a solution to the Gulf state’s pricing norms, which have been a hindrance to exports of generic drugs and vaccines from India, two sources familiar with the matter said.
The UAE, along with several upper-middle-income Gulf countries and European countries, use so-called Externally Referenced Pricing (ERP) to regulate drug prices. Under this policy, makers designate a basket of countries whose prices they use to inform the price of medical supplies in that country. Trade experts say that drug margins in the UAE are fixed, meaning wholesalers or distributors are not allowed to offer bonuses or discounts to pharmacies, giving them no incentive to sell lower-cost Indian generics.
The UAE, along with several upper-middle-income Gulf countries and European countries, use so-called Externally Referenced Pricing (ERP) to regulate drug prices. Under this policy, makers designate a basket of countries whose prices they use to inform the price of medical supplies in that country. Trade experts say that drug margins in the UAE are fixed, meaning wholesalers or distributors are not allowed to offer bonuses or discounts to pharmacies, giving them no incentive to sell lower-cost Indian generics.
Subscribe to continue reading
The UAE has a US$3.5 billion pharmaceutical market, and 80% of pharmaceutical products are imported. It is a transnational hub that can give Indian drugmakers access to other global markets, especially large GCC markets like Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
In addition, the UAE adopted a national vaccination policy in 2020, listing the United States, Germany, France, Switzerland and Ireland as vaccine import partners, but excluding India. Therefore, covid-19 vaccines from India cannot be shipped to UAE.
“The UAE has implemented a generic drug substitution policy since 2018, allowing the use of more than 6,000 generic drugs, whose prices are 60% lower than brand-name products. The main problem is public preference, and local pharmacies have no incentive to promote low-cost drugs,” said Arpita Mukherjee, professor at ICRIER .
To be sure, each country regulates the price and quality of imported drugs. In India, the pricing of imported medicines is investigated by the National Pharmaceutical Pricing Agency and the quality is monitored by the Central Drug Standards Control Organization. Under India’s free trade agreement with the UAE, it has managed to secure fast-track – expedited drug approvals, experts say. However, pricing hurdles remain.
Under the agreement, the UAE has agreed to allow Indian medicines to enter the market within 90 days of approval in the US and UK.
India’s pharmaceutical exports to the UAE more than doubled to $342.47 million in the last fiscal year, compared to $128.29 million in fiscal 2017. In FY22, pharmaceutical exports to the UAE amounted to US$332 million.
A person briefed on the developments said the reference price was being discussed at the “highest level” as the issue caught the attention of Indian drugmakers, which dominate the affordable generic drug industry.
According to a study by the London School of Economics, the reference prices used in the UAE come from relatively developed markets such as Austria, Bahrain, Belgium, Canada, France, Germany, Italy, Switzerland and the United Kingdom. Experts say that the absence of cheap India and China means that the price mechanism will be tilted to the higher side, so even if India produces affordable medicines, it will become a barrier for Indian exporters.
Externally referenced pricing attempts to ensure that a country does not pay more for a product than other comparable countries, or that low-income countries pay less. It may or may not result in an affordable price, and the price determined through external reference pricing is usually used for further price negotiations.
Experts also say that externally referenced pricing is widely used in many countries in Europe, as well as middle- and high-income countries in other parts of the world such as Brazil, Egypt, Saudi Arabia, Thailand, Turkey and the United Arab Emirates.
[ad_2]
Source link