The Hindu Business Line : Pharma industry against drug price control

THE Ministry of Chemicals and Fertilisers' plans of controlling drug prices to ensure cheaper medicine has not found favour with the pharmaceutical industry. The pharma industry comprising both Indian and multinational companies felt that prices of drugs could be monitored but not controlled.

Speaking to newspersons after a meeting with representatives of the pharmaceutical industry, the Chemicals and Fertilisers Minister, Mr Ram Vilas Paswan, said, "We will allow margins up to a limit. The Government will take action if margins are very high." As part of the UPA Government's Common Minimum Programme (CMP), the Government wants to keep drugs affordable in a country.

The Indian Pharmaceutical Alliance (IPA) comprising 11 big companies said they would oppose any restriction on the pricing of the "branded" drugs manufactured by them, but generic drugs, which have a margin to the tune of 2,000 per cent, could be brought under the price-surveillance of the Ministry.

Mr Paswan added that there is a huge gap between wholesale and retail prices of drugs. A survey initiated by the Government found that the retail prices of some unbranded drugs were almost 20 times the wholesale price.

The pharma industry has assured the Government that prices would not be increased in the near future. The IPA has already announced a price freeze till March 31, 2005.

The Government on Friday initiated a discussion on bringing drugs for treatment of cancer, HIV/AIDS and other life-threatening diseases under price control, something that did not find favour with the pharmaceutical industry.

At a meeting with representatives of the pharma industry, Mr Paswan sought views on bringing such drugs under price control. "Some drugs for the treatment of cancer are very expensive. Will price control make them affordable?" he asked. The industry was of the view that these drugs are very specialised and companies spend huge amounts of money on research and development.

According to Mr Satish Reddy, Managing Director, Dr Reddy's Laboratories Ltd, "We are against price control for these drugs as these are high-tech drugs and low volumes. Any type of control will hit availability as companies could stop manufacturing them."

Meanwhile, the Government reiterated that it would not allow drug companies to keep the drug prices high as a result of huge margins offered to the trade.