MoU between India and Indonesia may boost pharma export from India, says Anlon

Rajkot (Gujarat, India), Friday, July 20, 2018: The Union Cabinet chaired by the Prime Minister Mr. Narendra Modi has given its ex-post facto approval for the Memorandum of Understanding (MoU) between the Central Drugs Standard Control Organization (CDSCO), India and National Agency for Drug and Food Control (BPOM), Indonesia on cooperation in the field of pharmaceutical products, pharmaceutical substances, biological product and cosmetics regulatory functions. The MoU was on signed on May 29, 2018 in Jakarta, capital of Indonesia.

Commenting on the development, Mr. Punit Rasadia, Managing Director of Rajkot based pharmaceutical startup said that the MoU is expected to forge better understanding about each other’s regulatory requirements and would be beneficial to both the countries. It could also facilitate India’s export of pharmaceutical products to Indonesia.

Government information said that it will establish a framework for fruitful cooperation and exchange of information between the two countries in matters relating to Pharmaceutical products regulation on the basis for equality, reciprocity and mutual benefit. Further, it will facilitate better understanding between the regulatory authorities of the two countries.

The CDSCO is a Subordinate Office of the Directorate General of Health Services, which is an attached office of the Department of Health and Family Welfare and is the National Regulatory Authority for drugs, medical devices and cosmetics in India. The BPOM regulates these products in Indonesia. Approval of the Hon’ble Prime Minister had been obtained under Rule 12 of the Government of India (Transaction of Business) Rules, 1961 for signing the MoU by CDSCO (India) and BPOM (Indonesia).

The development comes as a breather for Indian pharmaceutical companies which are dependent export to US market. With the erosion of Drug price in the US market, a major export destination for Indian companies, many Indian APIs and Intermediate manufacturers felt the heat.

According to media reports published in the Hindu BusinessLine, price erosion in the fourth quarter of the last fiscal was around 8-10 per cent and this is expected to continue in the current financial year. The pricing pressure is the result of customer consolidation and recent measures by the US government to lower drug prices for customers. An analysis of the industry numbers will give a sense of the scale of the price erosion and the adverse impact it has had on the businesses.

According to Mr. Rasadia, when the export to US market is under pressure, Indian pharma companies are looking for export opportunities with other countries. Now, sanctioning of the MoU between India and Indonesia would definitely benefit Indian pharma companies, he added.

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