Curious case of India’s`public’ drug makers

If the purpose of government-funded public sector drug companies is to provide cost arbitrage through resisting drug monopoly by private firms, the very objective has taken a big blow in India!

According to a very recent communiqué from India’s health ministry, four out of total five public sector drug manufactures or PSUs, here, have been put on the blacklist. That means, these companies are `permanently de-registered’ from supplying certain drug formulations to healthcare centres run by the government. Interestingly, the govt has been the mass -if not the sole -buyer for most of these companies.

Quite often, these drug makers – with huge but under-utilised manufacturing capacities – are considered nothing but white elephants only to gorge the public money. Now that the health ministry stopping purchases citing “sub-standard quality” of the products as reason, their plight is up for anybody’s guess.

It was not once that the govt tried to revive these ailing, perennially loss-making PSUs through high doses of public funds. (India’s plan first to shut down and to rev up public sector vaccine makers who got disqualified by WHO for non-compliance of current good manufacturing practices (cGMP), recently, is another instance.) 

The PSUs, on the other hand have own explanations. They allege that the government is playing on the hands of powerful lobby of private drug makers.  The authorities have disqualified their products showing frivolous reasons like ‘poor dissolution etc’ without heeding their explanation, they argue.

Also, the disqualification is not `permanent’ but only for short period of three years, PSUs argue.

Whatever the term, the PSUs are all set to contest the govt’s unfair decision in court.