A uniform pricing regime ignores the heterogeneity within the pharma sector 

Dr Amit Kumar: How can policy frameworks better align commercial interests in the pharma sector with broader public health goals? 

I believe the starting point is to recognise that pharma companies respond to incentives, not intentions. So instead of expecting them to voluntarily prioritise public health, policy has to reshape the incentive structure itself. One effective way of doing this is through public funding for early-stage research, which already plays a huge role. For instance, a large proportion of foundational biomedical research globally is publicly funded through agencies like the NIH in the US yet the downstream products are often priced as if they were entirely privately developed. That creates a disconnect. Governments can correct this by attaching conditions to public funding, such as affordable pricing, technology transfer, or wider licensing once a drug is commercialised. 

At the same time, the current model where profits depend heavily on patentbased exclusivity and high prices is increasingly being questioned. This model works reasonably well for chronic or high-income market diseases, but it has clearly failed in areas like antibiotic development, where the World Health Organisation has repeatedly warned of a drying pipeline. The problem is structural: antibiotics are meant to be used sparingly, which makes them commercially unattractive under a volumebased profit model. That’s why there is growing support for “delinkage” models, where companies are rewarded through lump-sum payments or prizes based on the social value of the drug, rather than sales volume. 

We’ve already seen some movement in this direction. For example, the UK’s “subscription model” for antibiotics pays companies a fixed annual fee based on the public health value of the drug, regardless of how much is sold. Similarly, advance market commitments used successfully for vaccines guarantee a market for products targeting neglected diseases. These models show that it’s possible to de-risk innovation while steering it toward public priorities. 

Data also reinforces why this shift is necessary. According to global health estimates, diseases that disproportionately affect low and middle income countries receive a tiny fraction of total pharma R&D investment, despite accounting for a significant share of the global disease burden. This mismatch is not a market failure in the traditional sense it’s an incentive failure.

So, the larger point is this if you design the system well, you don’t have to choose between profitability and public health. You can align them structurally by ensuring that firms are rewarded for health impact, not just market size or purchasing power. That’s ultimately a more sustainable and equitable model of pharma innovation. 

Dr Amit Kumar: What role should government intervention play in areas such as drug pricing and access, without discouraging innovation? 

Government intervention in drug pricing and access is not merely a policy choice in countries like India, it is a necessity rooted in the realities of income inequality, out-of-pocket health expenditure, and uneven access to healthcare infrastructure. However, the real policy challenge lies not in whether to intervene, but how to calibrate intervention so that it simultaneously ensures affordability, incentivises innovation and sustains longterm pharma investment. 

At the core of the case for intervention is the undeniable evidence that markets for medicines do not function like competitive markets. Information asymmetry (patients relying on doctors), inelastic demand (life-saving drugs cannot be substituted) and monopolistic conditions created by patents mean that prices, if left unchecked they tend to rise beyond socially optimal levels. In India, this is particularly acute. According to data from the World Health Organisation and the World Bank, out-of-pocket expenditure still accounts for nearly 50–60 per cent of total health spending, one of the highest proportions globally. Empirical studies have shown that high medicine costs are a leading cause of “medical impoverishment,” pushing millions below the poverty line annually. 

This is where institutions like the National Pharmaceutical Pricing Authority (NPPA) become indispensable. By regulating prices of drugs listed under the National List of Essential Medicines (NLEM), the NPPA has demonstrably reduced the cost burden on households. For example, price caps on essential cardiovascular and anti-diabetic drugs, conditions that account for a large share of India’s disease burden have led to price reductions of up to 50–80 per cent in certain cases. Similarly, the government’s intervention in capping prices of coronary stents in 2017 resulted in reductions of over 70 per cent, making life-saving procedures significantly more accessible. 

However, the argument cannot stop at defending price controls; it must confront the countervailing concern that excessive regulation may dampen innovation. Pharma R&D is inherently high-risk and capital-intensive: estimates suggest that bringing a new drug to market can cost upwards of $1–2 billion globally. If firms anticipate that successful innovations will be subjected to rigid price caps, their expected returns diminish, potentially leading to under investment in research, particularly in areas already underserved such as rare diseases or antimicrobial resistance. 

This is why a differentiated regulatory framework is essential. A uniform pricing regime ignores the heterogeneity within the pharma sector. Essential medicines those addressing widespread, high-burden conditions justify strict price ceilings because they are often based on older molecules with established production processes and lower R&D recovery needs. In contrast, newer therapies, especially biologics or precision medicines, require more flexible pricing models. Countries like the United Kingdom and Germany have experimented with valuebased pricing, where the price of a drug is linked to its clinical effectiveness and broader social value, often assessed through health technology assessment (HTA) bodies. India has begun moving cautiously in this direction, with discussions around institutionalising HTA through bodies like HTAIn. 

Another critical instrument is public funding and risk-sharing. Early-stage drug discovery is often underfunded by private actors due to uncertainty. Governments can step in through grants, public research institutions, and public-private partnerships. The rapid development of COVID-19 vaccines offers a powerful illustration: substantial public investment de-risked private innovation globally. In India, initiatives involving the Indian Council of Medical Research (ICMR) and domestic firms helped accelerate vaccine development and manufacturing capacity. When public funds contribute to innovation, it strengthens the normative case for imposing affordability conditions on the final product—aligning private incentives with public health goals. 

In addition, strategic procurement and market shaping can achieve affordability without blunt price controls. Large-scale government procurement such as through schemes like Jan Aushadhi creates economies of scale that reduce per-unit costs while guaranteeing manufacturers a stable demand. Similarly, promoting generic competition has been one of India’s most successful policy tools. India’s strong generic pharma industry has made it a global supplier of affordable medicines, particularly for HIV/AIDS treatment in lowand middle-income countries. The use of compulsory licensing provisions under the TRIPS agreement though sparingly applied also serves as a credible threat against excessive pricing, reinforcing negotiating power. 

Importantly, the concern that price regulation inherently discourages innovation is often overstated, especially in the Indian context. Much of India’s pharma sector is focused on generics rather than frontier innovation. Therefore, moderate price controls on essential drugs are unlikely to significantly distort high-end R&D incentives. Instead, targeted incentives such as tax credits, faster regulatory approvals, and exclusivity periods for genuinely novel drugs can be deployed to stimulate innovation where it is most needed. 

Ultimately, the government’s role is to act as a market shaper rather than merely a market corrector. This involves designing a layered policy architecture: strict regulation where market failures are most severe (essential medicines), flexible and evidence-based pricing where innovation is critical (new therapies), and proactive investment in public health infrastructure and research. The goal is not to suppress profit, but to align it with public health outcomes. 

In a country like India, where access disparities are stark, the ethical imperative of ensuring affordable medicines cannot be subordinated to market logic. Yet, sustainability demands that innovation ecosystems remain viable. A carefully calibrated mix of price regulation, public investment, and institutional innovation offers a pathway to reconcile these objectives— ensuring that the pharma market serves not just those who can pay, but all those who need care. 

Dr Amit Kumar: How can India evolve towards a more balanced healthcare model that integrates preventive, promotive, and curative approaches alongside pharma growth? 

I think India’s healthcare architecture has, for a long time, been fundamentally skewed toward curative, hospital-based care. While that has undoubtedly expanded access to life-saving interventions, it has also produced a system that feels reactive, expensive, and uneven in reach. To me, the real challenge and opportunity is to move toward a more balanced model where preventive, promotive, and curative care are not treated as separate silos but as parts of a single, integrated continuum. This shift is not just desirable from a public health perspective; I see it as fiscally necessary in a country where resources are limited and the disease burden is rapidly evolving. 

When I look at current policy efforts, I see Ayushman Bharat as an important starting point. Its attempt to combine financial protection for hospital care with the strengthening of primary healthcare through Health and Wellness Centres is a step in the right direction. But I also feel that the deeper structural shift still lies ahead. For me, the real transformation will come from genuinely recentering primary healthcare so that it becomes the first point of contact for most health needs. Evidence from the World Health Organisation reinforces this intuition, countries that invest heavily in primary care tend to achieve better outcomes at lower cost, particularly when dealing with non-communicable diseases, which now account for the majority of deaths in India. 

What stands out to me most is how underutilised preventive care still is. Interventions like vaccination, early screening, and lifestyle modification offer disproportionately high returns compared to the cost of treating advanced disease. India’s Universal Immunisation Programme, for example, has saved millions of lives at relatively low cost, which makes it one of the most effective public health interventions we have. Similarly, I think the expansion of screening for hypertension and diabetes through primary care networks can fundamentally change health trajectories by preventing complications like stroke or kidney failure. The World Bank has repeatedly pointed out that investments in prevention generate long-term economic benefits by reducing both healthcare expenditure and productivity losses, and I find that argument particularly compelling in the Indian context. 

At the same time, I believe promotive health needs to be taken far more seriously as a core component of healthcare policy. Factors like nutrition, sanitation, and behavioral awareness often determine health outcomes more than clinical care itself. Initiatives such as Swachh Bharat Mission and POSHAN Abhiyaan clearly show that improvements in these areas can significantly reduce disease burden, especially for infectious diseases and child malnutrition. What I think is missing, however, is deeper integration, these programs often operate in parallel rather than being embedded within a unified health strategy. 

From the perspective of the pharma sector, I do not see this shift toward prevention as a constraint; I see it as an evolution. A system that prioritises prevention actually creates new and more sustainable forms of demand, vaccines, preventive therapies, and early diagnostics become central rather than peripheral. India’s leadership in vaccine manufacturing, particularly during the pandemic, is a strong example of how pharma growth can align with public health priorities. I also think that the expansion of affordable diagnostics and point-of-care testing represents an important frontier, both in terms of improving early detection and creating new market opportunities. 

For me, the institutional challenge lies in building the connective tissue that links all these elements together. Digital health infrastructure, such as the Ayushman Bharat Digital Mission, has the potential to integrate patient data across different levels of care, making the system more coherent and responsive. At the same time, expanding the role of community health workers and enabling taskshifting can bring preventive and promotive services closer to people’s everyday lives. I also think financing models need to evolve, if incentives continue to reward only treatment volumes rather than health outcomes, the system will remain biased toward curative care. Moving toward outcome-based approaches could help realign priorities. 

Ultimately, the way I see it, the goal is to move from a system that primarily treats disease to one that actively manages health. Prevention should reduce the need for cure, and curative care should, in turn, generate insights that strengthen preventive strategies. Unless these elements are connected in a continuous loop, we will keep addressing symptoms rather than causes. 

Dr Amit Kumar: What steps can be taken to ensure that patient access and affordability remain central to decision-making in the pharma sector? 

For me, the question of access and affordability is where the entire healthcare system is ultimately tested. No matter how advanced the technology or how sophisticated the policy design, if patients cannot actually obtain the medicines they need, the system has failed at its most basic level. In India, this is not an abstract concern, it is a structural reality. Out-of-pocket expenditure still makes up a large share of total health spending, and medicines account for a significant portion of that burden. What this means in practice is that affordability often determines whether people seek treatment at all, which is why I see it not just as a welfare issue, but as central to the functioning of the system itself. 

One of the most immediate ways to address this, in my view, is by strengthening the generic medicines ecosystem. India is often described as the “pharmacy of the developing world,” yet domestically we continue to rely heavily on branded generics that are far more expensive than necessary. Initiatives like Pradhan Mantri Bhartiya Janaushadhi Pariyojana show what is possible when policy is aligned with affordability, qualityassured medicines made available at prices that are often 50 to 90 percent lower than branded alternatives. And yet, I think the gap lies in implementation, limited awareness, uneven distribution, and entrenched prescribing habits continue to restrict the impact of these efforts. 

I also believe that regulatory intervention has a legitimate and necessary role in ensuring affordability. The work of the National Pharmaceutical Pricing Authority demonstrates that targeted price controls can have immediate, tangible effects. The sharp reductions in the cost of coronary stents and knee implants following price caps are a clear example of how policy can directly expand access to critical treatments. At the same time, I do not think affordability should depend solely on price caps. Procurement strategies that leverage scale, such as centralised purchasing models, have shown that it is possible to bring prices down through competition and negotiation, without undermining the broader market. 

Another issue is the gap between insurance coverage and actual access. While schemes under Ayushman Bharat have expanded financial protection for hospitalisation, a large share of healthcare spending in India still happens in outpatient settings, particularly on medicines. If these costs remain outside the scope of coverage, the financial burden on households will persist. To me, this highlights the need to rethink insurance design so that it reflects how people actually incur healthcare expenses, rather than focusing primarily on hospital-based care. 

At the same time, I think it is important to recognise that affordability alone is not enough, availability matters just as much. In many rural and underserved areas, even low-cost medicines are not consistently accessible due to weak supply chains and distribution gaps. Strengthening last-mile delivery, improving logistics, and integrating medicine distribution with primary healthcare systems are essential if policy interventions are to translate into real-world impact. Without this, even the best pricing policies risk remaining ineffective on the ground. 

I also feel strongly that transparency and accountability need to be at the core of the pharma ecosystem. Pricing decisions, regulatory approvals, and procurement processes should not be opaque. Greater transparency not only reduces information asymmetry but also builds public trust in the system. Tools like health technology assessment can help ensure that decisions are grounded in evidence and aligned with both clinical effectiveness and cost considerations. 

We should frame innovation and access as being in tension with each other. I think that is a false dichotomy. A well-designed system should ensure that innovation actually expands access rather than restricting it. Mechanisms like tiered pricing, public-private partnerships with affordability conditions, and even safeguards like compulsory licensing can help strike this balance. India’s experience with HIV/AIDS medicines is a powerful reminder of what is possible, when generic competition was enabled, prices fell dramatically, transforming access not just within the country but globally. 

In the end, I see the pharma sector as part of a broader social contract. Profitability is important and necessary for sustainability, but it cannot be detached from the core purpose of healthcare, which is to serve patients. For me, the real measure of success is whether innovation leads to wider access, not narrower. That is the direction in which policy needs to consistently push. 

Prof Uma Bhattad: How can India’s IP framework better support pharma innovation while ensuring timely access to affordable medicines? 

India’s IP framework strives to strike a balance between encouraging pharma innovation and ensuring access to affordable medicines. The various provisions of the Indian Patents Act, such as: 

• Evergreening: The provision u/s 3(d) of the Act which prevents evergreening of patents ensures early access to medicines. At the same time this provision also allows for protection of incremental inventions. 
• Compulsory licensing: The provision for compulsory licenses checks on the abuse of monopoly by the Patentee. In case if the medicines are not available at a reasonably affordable price, then compulsory licenses can be granted so that medicines are available at an affordable cost. This provision is not invoked often as there is a fear that granting compulsory licenses will act as deterrent to companies from launching products in India. 
• Bolar provision: Generic companies are allowed to conduct R&D and develop drugs similar to the patented drugs during the subsistence of the patent. This enables the generic medicines to be launched as soon as the Patent expires, so that drugs are made easily available without waste of time. As can be seen with the recent case of Semaglutide. 
• Parallel imports:India follows the International exhaustion of Patent rights. Thus allowing for parallel imports. This enables importation of drugs which are available at a cheaper price outside India, thus enabling access to cheaper medicines. 

All of the above provisions are in conformity to the Trips agreement which adapts the Trips flexibilities as affirmed by the Doha Declaration by prioritising public health over patent rights, thus ensuring access to affordable medicines, at the same time supporting pharma innovation. 

Prof Uma Bhattad: What changes or clarifications in patent regulations could help create a more balanced environment for both innovators and public health stakeholders? 

I believe that section 3 (d) should be removed from section 3 under the head of what are not inventions. A special section be inserted and the section should be reworded in positive language and the term “enhanced therapeutic efficacy” be defined clearly. Voluntary Licensing should be encouraged. At the same time Compulsory Licensing must be streamlined such that it is considered more as an enabler to easy access to essential and affordable medicines, rather be treated as a sanction to the owner of the Patent rights. 

Use of Artificial Intelligence (AI) in drug development may reduce the cost and time of R& D significantly. However, India lacks a regulatory framework when it comes to the use of AI. Therefore, we must have a framework to regulate proper and ethical use of AI particularly in the pharma and healthcare industry to address the issue of affordable access to medicines. 

Prof Uma Bhattad: As India strengthens its position in the global pharma landscape, how can it navigate international IP pressures while safeguarding domestic priorities? 

India can maintain its “pharmacy of the world” status by strategically partnering and collaborating with the multinational pharma companies. At the same time mandate domestic or local manufacturing. More R&D funding can be provided by way of public and private partnerships. By strengthening Indian pharma companies for R&D and adapting data exclusivity for a period of about five years. as required by the Trips plus, India can navigate International IP pressures, at the same time safeguard its domestic priorities. 

Prof Uma Bhattad: How can greater transparency in areas such as R&D costs and patent filings contribute to more informed discussions around drug pricing and access? 

Greater transparency in R&D costs and patent filings, helps stakeholders in analysing data and taking informed decisions related to drug pricing and access to medicines. 

Pharma companies typically are secretive about their R&D costs and also there is no transparency about the investment in R&D by companies. Also, the drug pricing is determined by the investment in R&D. Transparency in drug pricing helps in fair pricing assessment of medicines. Also, it is advisable to have drug pricing to be based on the quality of the drugs rather than linking the price with the cost of R&D. 

Further, transparency in information about patent filings (such as the one available on the PatINFORMED (Patent Information Initiative for Medicines), a World Intellectual Property Organisation (WIPO) database) where many companies share information about the status of their patents, across the globe can aid generics in taking informed decision about their entry into the jurisdictions where there is no patent or a drug is off patent, so that generics may enter such markets and access to drugs is made easy and also reduces chances of litigation. 

kalyani.sharma@expressindia.com
journokalyani@gmail.com

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