While domestic manufacturers have recommended to the government that the import duty on the drug be retained at the current level, Novartis is understood to have lobbied for a zero per cent duty. However, a query from The Financial Express on this issue did not elicit any response from Novartis. Domestic drug manufacturers see red in the recent statement by the minister of state for finance Dhananjay Kumar in Rajya Sabha where he said ``the Centre is considering a proposal to reduce import duty on the life-saving Cyclosporin drug.'' The government levied a 15 per cent import duty - which the domestic manufacturers argue is still lower than the normal 35 per cent duty on all other bulk drugs and formulations - in the Union Budget 2000-2001.

RPG Life Sciences (RPGLS) , Panacea Biotech and Cipla are the three domestic companies making formulation for Cyclosporin in India. In a pre-emptive move, domestic manufacturers have recommended against any import duty reduction, citing reasons that the move would be detrimental to not only the domestic manufacturers but also to the government.

Panacea Biotech has already been granted an international patent for the formulation and RPGLS has filed for an international patent for their formulation. RPG Life Sciences sources point out that after RPGLS started manufacture of Cyclosporin domestically and after imposition of import duty, the overseas suppliers reduced their prices from US $7 to US $5 per gram.

Domestic manufacturers also point out that the current demand for Cyclosporin bulk in the country is 250 kgs per annum, while the domestic industry has a current production capacity of 600 kgs per annum.

It has also been pointed out that the price of the Indian formulations is almost 40 per cent lower than the Novartis' brand Sandimmune Neoral.

Domestic manufacturers of Cyclosporin also say that while Indian companies have to pay an excise duty on local manufacture, Novartis will not be required to pay any countervailing duty at all if the import duty is withdrawn.

With the WTO mandated TRIP slated to come into force by 2005, the Indian pharma industry is now looking for government support. Sources also point out that the foreign exchange outflow on account of import of Cyclosporin formulations is to the tune of Rs 45 crore per annum.