The Hindu Business Line : Competition will control drug prices: IDMA

THE Indian Drug Manufacturers' Association (IDMA) has urged the Government to let competition in the market control drug prices. This plea from the industry comes even as the Government attempts to resolve the problem of high medicine costs.

Citing a recent study commissioned by IDMA, the association said, "It has been amply proved that competition is the best controller of prices." The Government should intervene only when an abnormal price increase takes place over a preceding year, it added.

There has been a downward trend in terms of prices in the last few years as is evident from the fact that the industry has recorded an overall price decline/stagnation for the last three years.

This downward dip is reflected across scheduled drugs as well as the non-scheduled drug basket. In the non-scheduled drugs segment, it was seen that competition kept prices under control.

The overall market comprising the top 100 selling brands, based on the value turnover as per December MAT 2003, witnessed a price decline twice in the last three years; with the year 2002 recording a very nominal price increase, the note said.

Similar observations were seen across the analysis done at the molecular level — wherein new molecules have witnessed very high price decline due to increased competition across fast growing markets.

"Control brings down the usage of drugs as seen by the de-growth in volumes of scheduled drug basket as well as decline in the span of control over the years across the top therapeutic categories," the note said.

IDMA's offer on prices: On its part, the IDMA has told the Government that its members would voluntarily reduce the price of specified branded generics (where the margins are very high) by 20 per cent compared to the prices of similar branded products.

In a letter to the Government, the IDMA has made the offer, in an effort to resolve the issue of high price of medicines, even when they were copies of the original brand.