The Hindu Business Line : Drug prices may come down more than 50 pc

PHARMA CONCLAVE: Mr Ram Vilas Paswan, Minister for Chemicals and Fertilisers; flanked by Mr Malvinder Mohan Singh (left), Chairman, Religare Enterprises Ltd (Ranbaxy); Mr Ranjit Shahani (right), Vice-Chairman and Managing Director, Novartis India Ltd; and Mr Harinder S. Sikka (extreme right), Director, Corporate Affairs, Nicholas Piramal India Ltd; at a meeting in the Capital on Thursday. - Kamal Narang

New Delhi , Aug 17

The prices of more than half of all drugs will come down by around 50 per cent with effect from October 2 with the introduction of fixed margins on generic drugs for wholesalers and retailers, the Minister for Chemicals, Petrochemicals, Fertilisers and Steel, Mr Ram Vilas Paswan, told newspersons after meeting representatives of the pharmaceuticals industry today.

The Ministry would come out with a notification fixing the wholesalers' margin at 35 per cent of the manufacturers' selling price and retailers' margin at 15 per cent of the manufacturers' selling price by next week, Mr Paswan said.

"The industry has voluntarily agreed to this and has proposed us to bring out a notification. We will do it within seven days," he added.

This, in effect, would not reduce the manufacturers' profits but can cut down the cost of medical institutions that procure generic drugs.

However, since the usual practice among all retail medical practitioners is to prescribe branded drugs for various reasons, the move may not cut general treatment cost for the common patient.

Mr Paswan also said that the industry and the Ministry have agreed that the upper limit price for drugs would be kept outside price control at Rs 3 a tablet. Drugs priced more than Rs 3 per tablet would come under price control.

However, there appear to be differences between the Government and the industry on the very issue of price control.

After the meeting, Mr Malvinder Mohan Singh, Managing Director and CEO of Ranbaxy Laboratories, said that the focus should be not on cost-based price control but monitoring.

"If the price goes up by more than 20 per cent, then the regulator can look into it and ask why it is happening."

Mr Paswan said that the steps taken by the Ministry to control prices are according to the Supreme Court verdict. "The verdict clearly stated that the prices of these essential drugs `should not be kept out of control'."

He also said: "The interpretations of the verdict made by the Ministry and the industry are not the same. So, a 14-member committee has been formed today to look into five different aspects."

The committee would have 11 members from the industry and three from the Ministry, including the Secretary, and the Chairman of the National Pharma Pricing Authority (NPPA).

The committee would look into the issues of public-private partnership to help families living below poverty line, whether price rise can be contained through competition, R&D, concessional pricing for Government procurement and whether monitoring can replace cost-based price control.

It would submit its report by September 30, he said.

This would, however, delay the National Pharmaceuticals Policy further, which was to be finalised in August. "The current session will be over soon. So now we would try to bring it in the winter session," Mr Paswan said.

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