Many small and medium drug makers are under pressure from key buyers in foregien markets to cut prices in line with government mandated price reduction in India. In may the government's drug price control order set price caps on 151 of 348 essential medicines amid resistance from the industry . Now the importers in the gulf region as well as some African nations are demanding that they be given drugs at reduced price too.
As a result , many small and medium Indian drug makers are finding it difficult to execute export orders . India exported medicines worth $1 billion to the gulf and over $2.6 billion to the African regions in 2012 - 13 the total value of drug exported this year was $14.5 billion "we can understand the compulsion of Indian government to reduce medicine prices for domestic consumers, but the fact is that it is affecting our exports " says PV Appaji director general of pharmaceutical export promotion council.
Rajesh Madan, executive director of Delhi based Medicamen biotech said client in Saudi Arabia and Ethiopia are asking that they be given discount for drugs such as Amoxicillin , Ampicillin and Ibuprofen "They are demanding that the export price should not be more than what they are in India " he said . This demand would be difficult for Indian drug companies to meet as there are more compliance and packaging requirements for exports . Under the new DPCO, Prices of essential drugs have gone down by as much as 60% . While large Indian companies with deep pockets have the ability to cut prices , smaller manufactures are finding it difficult to meet the demands " We are currently unable to quantify the exact impact of price revision on our bottom line ..... we urge the government to initiate measure to safeguard Indian pharma exports " said BR Sikri , managing director of next wave India , a Himachal Pradesh based drug manufacturer
A march report by Alpen Capital on the gulf Pharmaceutical industry estimated the total market size in the region at $8.5 billion in 2012 with Saudi Arabia having a lions share at about 59% followed by united Arab Emirates at over 18% "the demand from the gulf cooperation council to reduce price is probably the consequence of the drug price standardization mechanism that is to be introduced in GCC countries by 2014 " said Utkarsh Palnitkar , head of pharma and life science division at KPMG India. a senior official in the union commerce ministry said the government is considering measure to safegaurd indian drug exports .
well I dnt see any point by the countries to reduce the export price in their case and this will surely affect the Indian pharma export....................