India was among the first countries of the Third World which attempted to formulate a National Drug Policy, promote indigenous manufacturing and technological capability in pharmaceuticals, and control the prices of selected essential medicines. The effort was somewhat half-hearted, never properly focused on the concept of essential drugs or a need clause, and not adequately backed by public funding or regulations.
The attempt reached a high point in the 1970s and resulted in the robust growth of an indigenous pharmaceuticals industry which benefited from a favourable regime of intellectual property rights (IPR) that allowed innovation. In practice, the policy was substantially diluted during the 1980s under pressure from the powerful drug industry. By the early 1990s, it was very nearly abandoned as the Indian government, under the tutelage of the World Bank and the International Monetary Fund (IMF), embraced a new economic policy. This policy favoured indiscriminate deregulation, extensive liberalisation, privatisation of the public sector and cutbacks in public investment in health care, along with a dismantling of the effort to achieve self-reliance and protect indigenous producers against oligopolistic foreign cartels.
With the signing in December 1993 of a new international trade agreement under the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), involving a severe change in the IPR regime, there are signs that India's gains-improved (but by no means adequate) availability of relatively low-priced medicines, and a vigorous technological capability in the drug industry-will be wiped out. There is a growing danger of a considerable deterioration in the drug supply situation in India and adverse effects on the country's poor. This danger results from the failure to impose rational controls on the registration of drugs or prescribing practices-itself related to the ideology underlying the new economic policy-the absence of an independent source of information on drugs, and the soaring prices of medicines. Praful Bidwai is a well-known and highly respected Indian journalist. He spent many years as Assistant Editor of The Times of India specialising in political, economic and science issues. Since 1993, he works as a free-lance writer contributing articles and columns to several leading national and international newspapers and journals.