ACTION ON KATOCH PANEL

• The Katoch committee, constituted by the Department of Pharmaceuticals to formulate a long term policy for reviving the domestic manufacture of APIs in the country, had submitted its report in February last year. The appointment of committee was in the context of deplorable state of API production in the country with almost a total dependence on China for India’s requirements of APIs. The committee had made a number of sweeping recommendations for the revival of API manufacturing in the country. One such proposal was cluster development model for the pharmaceutical sector with tax free status to cluster developers and participants for 15 years. Initial investment support will be provided by the government for development of clusters in the form of a professionally managed dedicated equity fund for the promotion of manufacture of APIs. All central and state duties, taxes and levies in creating the entire cluster infrastructure and individual unit infrastructure should be made nil. For this a unit should ensure more than 50 per cent capacity utilization of drugs included in the National List of Essential Medicines. The panel also recommended soft loans to the units through interest subvention up to 7.5 per cent, at least on par with interbank lending rates. Capex loan to the manufacturers of APIs for high priority drugs with a moratorium of 10 years for repayment was another suggestion. As a part of long term strategy to support API sector, the panel felt that coordination between the ministry of commerce and other regulatory authorities is necessary for measures like anti-dumping and safeguard duties. Revival of Indian Drugs and Pharmaceuticals Ltd and Hindustan Antibiotics Ltd is another key recommendation for strengthening growth of APIs and intermediates considering the leading roles they played in fifties and sixties.
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• Now, adoption and implementation of these recommendations is extremely urgent considering the increasing non availability of most of the bulk drugs from indigenous sources. Indian pharmaceutical industry continues to be at the mercy of Chinese API makers and they frequently jack up prices most of the APIs forcing Indian formulators to correspondingly raise the formulation prices. A situation like this should not have been allowed to happen for such a long time considering growing number of poor and sick population in the country. The government reported to have already examined the recommendations of the Katoch panel in detail some time ago. Some of state governments have also shown interest in setting up mega parks for bulk drug manufacturing in their states but are waiting for the green signal from the Centre. There is an urgent need to act on the recommendations without any further delay and the DoP needs to be follow it up with the Central government. However, a significant aspect to be taken note of while implementing the recommendations is the issue of pollution control. There is no doubt that chemical industry including API manufacturing is one of the major polluting industries in India. The cost of pollution control is very high and it requires highly capital intensive technology. That calls for appropriate rules and regulations to have effective check on the pollution levels at all the manufacturing sites.

Action, katoch panel