India’s next trade frontier for pharma is regulation
For decades, trade negotiations were primarily about tariffs and countries negotiated market access by curtailing customs duties and dismantling quotas. In pharmaceuticals, that world has largely disappeared. Today, a medicine may be duty-free and go to a country and still never get to a patient. The real barriers are now in the approval process, inspection protocols, technical standards, manufacturing certification, and regulatory processes, and vary from one country to the next. India's pharmaceutical industry knows this more clearly than any other. It is internationally one of the biggest producers of generic drugs and sells to more developed and developing markets and has in the past shown manufacturing capability. But many Indian companies continue to struggle with the very same problem when trying to expand overseas, not because of tariffs but because of the regulatory burden. And NITI Aayog’s proposal to have a pharmaceutical chapter in future free trade agreements is something to discuss, particularly if it continues to be in the making. It shows a wider sense that trade policy can no longer be divorced from regulatory policy. In many industries and particularly pharmaceuticals, the two are now inseparable.
