54 SOCIAL SCIENTIST
TABLE I
SHARE OF FOREIGN SECTOR IN DRUGS SOLD IN INDIA
Drug Group Share of Foreign Companies in All-India Sales (per cent)
Antibiotics 80.00
Vitamins 80.00
Tonics 56.00
Haosatinics 88.00
Analgestics Anti-rheumatics 72.00 82.10
Cough syrups 83.30
SOURCE: L K Mutatkar, "Drug Control Order Futile"', Economic Times, 1 May 1975, p 5.
in 1973, foreign firms accounted for 500 tonnes, a mere 11 per cent. Indian private and public sectors respectively contributed 2900 and 1200 tonnes. The two recently set up public sector units are engaged largely on the making of bulk drugs.
Formulations made by these two units were valued at only Rs 200 million out of a total Rs 3700 million turnover in the Indian market. Eighty per cent of the formulations are produced by 28 multinationals and 18 of their affiliates. Multinational firms do not go in for basic drugs in which the turnover ratio is less than unity. In formulations on the other hand it is as high as 1:7.5, a powerful incentive to spread the net far and wide. During the last two years, firms like Sandoz, Roche, Johnson & Johnson have introduced into the market common formulations which were already being made by the domestic small-scale sector. Not content with this, compound drugs are imported from foreign principals at exorbitant prices after slight modifications of formulae.
Remedy Worse than Disease
Within its narrow range of bulk-drug production, the foreign sector confines itself to high money-value and low-tonnage drugs, starting frequently from late intermediaries or even penultimates imported from parent organizations. Whereas the Indian sector produces bulk drugs valued at Rs 1.25 lakhs per tonne, the foreign sector controls the production of bulk drugs at Rs 3.5 lakhs per tonne, and exclusively for their end-product, the formulations. As a result, even with government's price controls the foreign firms have managed to maintain an enviable profit rate while the Indian companies recorded a profit decline by 21 per cent. While foreign companies were permitted to import bulk drugs for their formulations, the Indian units which applied for the import licences were told to produce them before their formulations could be permitted. Most of the multinationals import bulk material from the foreign principals at quotations higher than elsewhere thus helping the parent companies amass excessive profits at the expense of Indian