MEDICINE for Masses was part of the Indian freedom struggle whereby the country’s scientists stood up against foreign drug companies during the British Raj in India.

Acharya Prafulla Chandra Roy, chemistry professor at Presidency College in Kolkata was the pioneer in this effort. He established Bengal Chemical & Pharmaceutical Works Ltd. in 1901 and inspired others.

Dr. Upendranath Brahmachari, a leading scientist and professor of tropical diseases in the present NRS Medical College and Hospital in Kolkata, discovered Urea Stibamine in 1922 for the treatment of Kala-azar. His discovery saved millions of lives in India. In 1924, he established Brahmachari Research Institute for the research and manufacture of medicines.

Dr. Hemen Ghosh in Standard Pharmaceuticals Limited in West Bengal in 1938 discovered manufacturing process of bulk penicillin first time in Asia from orange peels.

Ashok Kumar Sen, a scholar in organic chemistry, established East India Pharmaceutical Works Limited in 1936 and produced everyday useable drugs from basic chemicals. Narendra Nath Dutta established Bengal Immunity Company Ltd in 1934 and did pioneering work in the mass production of Sera and vaccines and drugs against malaria which was widespread in the entire eastern India.

Dr. Khwaja Abdul Hamied who, along with Zakir Husain, was the founder professor of Jamia Millia Islamia, was an honorary professor and a member of the executive council of Aligarh Muslim University; a member of the Senate of Bombay University and a fellow of the Royal Institute of Chemistry. He onceptualised the Council of Scientific and Industrial Research (CSIR) and was a member of its governing body from its inception till his very last day. He was an ardent disciple of Mahatma Gandhi. He founded Chemical, Industrial and Pharmaceutical Laboratories (CIPLA) in Bombay in 1935.

B R Amin was another pioneer in drug production in India. He established Alembic Ltd in 1907 at Vadodara. Ambalal Sarabhai was a leading industrialist of Ahmedabad and was an ardent supporter of Mahatma Gandhi. Sabarmati Ashram was established with his help. He founded Sarabhai Chemicals in 1943 at Vadodara with mass production of calcium lactate from molasses and other fine chemicals and pharmaceutical products. India’s renowned space scientist Vikram Sarabahai was associated with Sarabhai Chemicals in later days.

Post-Independence Period

For the capitalist development in India after Independence, establishment of financial, industrial, labour and self-reliance structures started taking place. In the field of pharmaceuticals (i) public sector was established, (ii) new patent law was enacted, and (iii) drug policy was formulated based on the Hathi Committee’s (Parliamentary committee) recommendations and Drugs Prices Control Order (DPCO) was issued; at the core of which was the theme, as noted by Hathi Committee, medicines for the common man at affordable prices.

Firstly, with the discovery of higher antibiotics and other modern medicines, multinational drug companies had been importing ingredients, converting to formulations and selling in Indian market at high prices beyond the reach of the common man. In such a situation, first public sector plant, Hindusthan Antibiotics Ltd, at Pimpri near Pune was established for mass scale production of antibiotics, but it suffered as US drug MNC Emerck supplied obsolete technology. Only after establishment of IDPL in 1960 and its mass production of antibiotics at low cost with Soviet technology forced drug MNCs to establish their modern drug manufacturing plants in India and substantially cut down prices of antibiotics and other drugs. Public sector drug companies were also established in several states and sick private sector companies like Bengal Chemical, Bengal Immunity and Smith Stanistreet, all were nationalised during the Left Front government in West Bengal.

Secondly, after 10 years of debate inside and outside Parliament, India enacted a new Patents Act, 1970 in which ‘product’ patent of drugs was not allowed. Absence of patent in drugs helped rapid growth of Indian sector companies and subsequently taking over huge off-patent medicine (internationally known as ‘generic’) market in different countries, including countries with advanced economies, with quality products at low prices. India effectively resisted the pressure of powerful drug MNC, particularly of US origin, on the patent issue despite the US Congress adopting Super 301 and Special 301 Acts imposing penalties for drugs’ ‘patent violations’; and the pressure in the GATT (the precursor of WTO) negotiation.

Thirdly, based on the Hathi Committee’s recommendations, Drug Prices Control Order, 1979 was issued which had two significant features – (a) fixing cost-based control of drug prices and (b) all drugs were brought under price control. All drugs were divided in three categories with lists of drugs - Category I with the list of essential drugs; Category II with the list of very important drugs; and Category III with the list of rest of the drugs. For category I drugs Maximum Retail Price (MRP) was fixed at 40% Mark Up over ex-factory costs + excise duty; for Category II drugs the Mark Up was 55%; and for Category III the Mark Up was 100%. However, under pressure from drug lobby and based on the Kelkar Committee’s recommendation, DPCO, 1987 was issued entirely removing Category III from price control; removing number of drugs from the list of essential drugs in Category I and Category II drugs list; and increasing Mark Up to 75% for category I and to 100% to Category II drugs.

Neo-liberal Stage

In the neo-liberal stage since 1990s, demolition drive began on all these structures of ‘Medicines for Masses’ which were created based on the landmark Hathi Committee Report, 1975.

Destroying PSUs

Even during pre-neoliberal stage, the central government undermined the role of drug producing public sector units (PSUs) from production of bulk and formulation drugs and vaccines in favour of the Indian and foreign private sector drug companies. As a result, today Indian drug industry has become hugely dependent on import of cheaper bulk drugs despite the large number of PSUs, with their huge infrastructures, remaining idle and on the verge of formal closure. There is big threat to the availability of medicines for the Indian masses.

FDI in Pharmaceuticals

The Manmohan Singh government allowed 100 per cent FDI through automatic route in Greenfield projects (new ventures) and, under approval by FIPB (Foreign Investment Promotion Board), in Brownfield projects. Those foreign drug companies, who left India during pre-neo-liberal/early neo-liberal stage, started coming back through FDI’s Brownfield route. To facilitate the process of Indian companies’ takeover by drug MNCs, the Modi government has, now, taken one more step allowing up to 74 per cent of FDI in Brownfield in pharmaceuticals through automatic route.

Resistance against Patent Regime

India surrendered to US pressure and signed the WTO agreement at Marrakesh in 1994 accepting ‘product’ patent of drugs. However, it was necessary to amend the Patents Act in accordance to the international trade agreement. Here resistance against patents of drugs in India is still continuing. It is to the credit of the Left parties in Parliament that an amendment was inserted in Section 3(d) in the Patents Act in 2005 which reads as, “The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance…is not inventions within the meaning of the Act.” Drug MNC Novartis lost its anti-cancer drug ‘Gleevec’ case in the Supreme Court on this ground.

In addition, through judicious use of ‘compulsory licensing’ of TRIPS agreement commensurate to the Patents Act in India, relief can be provided to the people with cheaper generic drugs.Compulsory licensing is a provision under the Trade Related Intellectual Property Rights (TRIPS) agreement where the government allows a company to manufacture and sell patented drugs in public interest without the consent of the innovator company. Bayer challenged this clause in case of their anti-cancer drug ‘Nexavar’ in the Supreme Court. The Supreme Court ruled against the company's claim and said that it had not shown any fresh research and development expense figures to warrant court interference. Indian companies are producing both these anti-cancer drugs and selling in India and in different countries of the world at a much cheaper price.

However, during Prime Minister Modi’s visit to the USA in September, 2014, three working groups were formed between the USA and India on three pre-dominant issues -- defence, atomic agreement and patents in pharmaceuticals. Working through these working groups, the USA has succeeded in defence agreement and in circumventing ‘supplier’s responsibility’ clause in case of atomic disaster. The working group on drug patents is working hard for removal of Section 3(d) in the Patents Act and restriction on compulsory licensing.

Dilution and Elimination of Drug Price Control

The DPCO, 1995 further diluted the control on drug prices restricting the drug price control only to essential drugs in Category I, bringing down the number of drugs in the list of essential drugs from 140 to 76; raising Mark Up and removing all other drugs from price control. In a 2005 order, the union finance ministry fixed excise duty collection on all drugs, including essential drugs, not on hitherto followed ex-factory cost but on the retail price of the drug, the MRP (with some slab limitation). With this change from cost-based excise duty to MRP-based excise duty collection, the prices of all drug jumped upward.

In a 2003 PIL case, the Supreme Court issued direction to the central government to bring essential drugs under price control. The government-appointed expert committee identified 348 drugs and the government issued DPCO, 2013 replacing earlier orders. DPCO, 2013 made a complete departure from the past. Instead of cost-based price control on drugs, DPCO 2013 invoked market-control on drugs prices. The formula is to calculate average maximum retail price of a medicine of same strength and dosage in the enlisted 348 drugs of such companies which have 1 per cent or more market share, add 16 per cent for the retailers and then put it as the ceiling price of the essential drugs. Further, the DPCO, 2013 allows up to 10 per cent annual increase on other drugs outside the essential drug list.

Preparing Ground for Patent Regime of Drugs

In the capitalist system in the commodity market brand promotion and brand completion are universal. However, in case of drugs in the capitalist system, it is the monopoly patented drugs which took over the market. Rests of the drugs are calledgeneric drugs. In India, however, in the absence of patent on drugs since Independence, drug companies embarked on brand promotion and brand competition. The drugs in chemical names are called as generics under Indian drug laws. This structure must be demolished to usher in the patented drug regime in India. On one side, DPCO, 2013 allows market-based price control, on the other side, campaign is launched that only converting to generics will bring down drug prices automatically.  

Ground for Struggle

All these have prepared ground for struggle to ensure availability of all drugs, particularly live-saving drugs to masses; for public sector taking over the main responsibility of bulk drugs and vaccine production; to revert back from market-based price control to cost-based price control of all drugs; and zero GST on all essential drugs. (END)

(From a paper presented at a seminar held at Cuttack as pre-conference activities of the 15^th Conference of the CITU)