Govt Plans to Revive Sick PSU Drug-Makers

  • Top-selling medicine brands to treat stress, hypertension, HIV , pain and pneumonia may soon become cheaper
  • With the drug price regulator set to bring in at least 100 new drugs under price control to include combinations, dosages and strengths commonly prescribed by doctors sold by pharmacists.
  • Though National Pharmaceutical Pricing Authority had in May failed in its bid to slash prices of drugs outside the National List of Essential Medicines, there appears to be a political consensus this time.
  • P 14 Taking a cue from Prime Minister Narendra Modi's `Make in India' pitch, the government is working to revive state-owned sick drug manufacturing companies like Indian Drugs and Pharmaceuticals Ltd (IDPL), Hindustan Antibiotics and Bengal Chemicals to cater to the unmet need for essential medicines like anti retro virals, cancer drugs, complex antibiotics and medicines used in treatment of tuberculosis.
  • Often, these drugs are in short supply , mainly the ones distributed through government health programmes.
  • By using the capacities available at central public sector units (CPSUs), the government can not only meet the demand but also bring down prices.
  • Currently , these companies are in dire state with huge debt on their books.
  • Some firms such as Hindustan Antibiotics are not even able to pay salaries to their employees, often leading to strikes and protests.
  • Production in the company has almost come to a standstill because of its financial health.
  • IDPL is struggling with a debt of over Rs 3,000 crore, whereas Hindustan Antibiotics has over Rs 300 crore of debt.
  • The department of pharmaceuticals (DoP), under the ministry of chemicals and fertilizers, is formulating a Cabinet note for revival of these companies.
  • Among various measures, the department is likely to propose part divestment of the huge land bank available with these firms to repay the enormous debt, which is creating hurdles in smooth functioning of many of these firms.