The Hindu Business Line : Pharma body announces price freeze till March

CONSUMERS will get some reprieve from the steady increase in drug prices, with two major domestic pharmaceutical associations putting a freeze on the price of medicines until March 31, 2005.

The Indian Pharmaceutical Alliance (IPA) announced here on Thursday that the "voluntary action" had been initiated to assist the Government in containing inflationary pressures and alleviating the adverse impact on consumers.

This announcement comes even as another industry forum, the Indian Drug Manufacturers' Association (IDMA) prepares to make a similar announcement when it meets the Union Chemicals and Fertiliser Minister, Mr Ram Vilas Paswan, later this month.

The cheer for the consumer comes from the fact that about 80 per cent of the total drug market in India gets covered between the two industry bodies — IPA and the IDMA.

"Despite the increasing oil and raw material prices, members of the IPA have agreed to put a freeze on all medicine prices," said the IPA Chairman, Mr Habil Khorakiwala. However, responding to a query on the hit that the pharma companies would take on account of the initiative, the IPA Chairman said: "There will be an impact, but it has not yet been measured." Further, he elaborated that the present prices will remain, only the escalation would not be reflected.

Mr D.G. Shah, Secretary General, IPA, said that competition will further keep the medicine prices in check.

Mr Korakhiwala is the Chairman of Wockhardt Ltd and his company along with 10 other companies, such as Ranbaxy and Dr Reddy's Laboratories are part of IPA. The 11 drug companies together have a combined market share of 30 per cent of the domestic market.

Meanwhile, Mr Daara Patel, Secretary General of IDMA, told Business Line that a similar announcement was expected from his organisation shortly. "IDMA's mandate has always been to keep prices affordable. But to support the Government's efforts to curb inflation, our members too will put a freeze on price increase for the next six-odd months. For drugs under price control, we are taking a look at whether the companies can go ahead with the freeze or whether a special case may have to be made out for some drugs. But we will be meeting the C&F Minister shortly and apprising him of the same."

IDMA has about 600 members who have a collective share of about 50 per cent of the domestic market, he said.

Industry analysts point out that the drug majors' announcements come even as Mr Paswan turned the heat on them by threatening to bring more drugs under price control.