Financial Daily from THE HINDU group of publications
Monday, Jan 02, 2006
Financial Daily from THE HINDU group of publications Monday, Jan 02, 2006 |
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Policy Industry & Economy - Pharmaceuticals Govt to step up monitoring of small hikes in drug prices Nithya Subramanian
New Delhi , Jan. 1 THE Government will step up monitoring of even small price hikes of drugs and pharmaceutical products. While currently the National Pharmaceutical Pricing Authority (NPPA) seeks explanations from companies on price hikes of over 20 per cent in a year, Part Two of the proposed new Pharmaceutical Policy is likely to bring this cap down further. According to sources in the Ministry of Chemicals and Fertilisers, this would be applicable to drugs outside price control. "Since the NPPA fixes the price of 74 bulk drugs, companies are unable to make any price changes on their own," they said. "Currently, if the price of a particular drug increases by over 20 per cent, companies have to provide reasons for the hike. If the regulatory authority is not convinced with the rationale, companies are asked to bring their prices down. Since the aim is to prevent irrational price hike, we are planning to reduce the cap," said sources. However, the Ministry is still debating the new cap and will announce it shortly. Meanwhile, the Pricing Policy is likely to have different models to regulate prices of different category drugs. For instance, hospital supply medicines will not be subject to price control while some of the selected drugs will be subject to cost-based price control. For the remaining medicines in the essential drug list, the Government is planning to cap the ceiling prices based on the weighted average of the maximum retail price (MRP) of the top three brands in both volume terms and value terms. Also, prices of drugs for cancer and HIV/AIDS will be kept affordable and those for patented drugs will be pre-negotiated. The Policy will also elucidate ways to strengthen the NPPA. A Committee set up by the Department of Chemicals and Petrochemicals will review all existing guidelines, norms and procedures followed by the NPPA for fixing prices of bulk drugs and formulations.
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