Budget 2017: Boon for patients, bane for Big Pharma

Underlining the need for more generic drugs in the market, Arun Jaitley announced an amendment to the Drugs and Cosmetics Act in his budget speech. "We propose to amend the Drugs and Cosmetic Rules to ensure availability of drugs at reasonable prices, to ensure use

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Underlining the need for more generic drugs in the market, Arun Jaitley announced an amendment to the Drugs and Cosmetics Act in his budget speech.

"We propose to amend the Drugs and Cosmetic Rules to ensure availability of drugs at reasonable prices, to ensure use of generic medicines," he said. "New rules regarding medical devices will be formulated. These rules will be internationally harmonised and attract investments into this sector. This will reduce the cost of such devices."

This triggered an immediate reaction from both the pharma companies and



the stock market. Shares of Big Pharma companies like Aurobindo Pharma, Sun Pharma, Cipla and Glenmark took a beating, with shares of Aurobindo slipping over 2%.

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India is emerging as one of the world's pharma manufacturing hubs. A report by TechSci Research expects India to be among the top three pharmaceutical manufacturing countries, with a turnover of $55 billion by 2020. This report was hailed by many pharma companies.

Jaitley spoke little about reform in the pharma sector but his promise to increase the availability and accessibility of generics is positive news for poor patients.

The pharma sector is also unhappy with the lowering of tax on medium and small scale enterprises, something that is likely to give a fillip to the domestic pharma sector.