The Hindu Business Line : GoM hears industry views on pharma policy

New Delhi, Sept. 12 The Group of Ministers (GoM) reviewing the Pharmaceutical Policy 2006, heard presentations from the industry and consumer groups on Wednesday.

The GoM, chaired by Mr Sharad Pawar, Minister of Agriculture, was meeting to discuss the controversial policy, which includes the proposed extension of price control to 354 drugs from the existing 74.

However, the impact of the move continues to be debated by the Ministry of Chemicals and Fertilisers and the industry. The industry and its associations like the CII represented by Ranbaxy Laboratories’ Mr Malvinder Mohan Singh argue that the new price control would directly and indirectly cover a significant 60 per cent of the market. The Ministry, however, has maintained that the policy will only cover 32 per cent of the market.

The Indian Pharmaceutical Alliance argued that the “cost-based system relies on ‘normative’ costs, which ignores quality of product, standards of manufacturing practices, investment in R&D and export market development costs.” It also warns that the price control move “is appealing to consumers but the benefits may not be lasting as manufacturers cut back production of un-remunerative items.”

In fact, Ranbaxy’s Mr Singh has made a case for limiting price control to even fewer drugs (than the existing 74). “Indian drugs are amongst the cheapest in the world and are even cheaper than those in Pakistan and Sri Lanka. India accounts for about 14 per cent of global pharmaceuticals in volume, but only about one per cent in value,” he said.

The industry also downplayed the Ministry’s proposal to increase Maximum Allowable Post-Manufacturing Expenses, from 100 per cent for the existing formulations, to 150 per cent for new formulations. The taxes (34 per cent) and trade margins (30 per cent) will take away substantial chunk of the increment, leaving only 36 per cent for the manufacturer, it said. Consumer Voice, which also made its presentation to the GoM, called for pharma-related issues to be taken up by one National Drug Authority, and for strengthening of state government powers.

Mr Ram Vilas Paswan, Minister of Chemicals and Fertilisers, hoped that the GoM would meet again.

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