Drug policy discussions down to the wire

P. T. Jyothi Datta Mumbai | Updated on March 12, 2018


With just seven days to go for the Government to place its revised drug policy before the Supreme Court, hectic negotiations are back on the table.

The Government had told the Supreme Court that it would place the revised pharmaceutical pricing policy before the Cabinet by mid-November, and before the Apex Court later in the month.

But as the time-line to the Court comes up next week, the plot has thickened. The Finance Ministry cast its lot with a cost-of-production-based formula to control medicine prices. This move by the Ministry is not in sync with the proposal of the Department of Pharmaceuticals (DoP) to go with a market-price based formula to control medicine prices.

The differences still remain to be ironed out — first at the meeting of the Group of Ministers, scheduled for Wednesday, and then the Cabinet on a subsequent day.

The Health Ministry, which initially opposed the market-based pricing formula, has come around to supporting it. And support for the DoP formula has come in from the Commerce Ministry.

The Government’s over-arching proposal to bring all 348 drugs on the National List of Essential Medicines under price control, though, seems to have sailed through.

Divided stakes

Outside Government circles, opinion in the stake-holder community continues to be divided. The pharma industry supports a market-price based formula , but pro-health groups have called for a formula based on the cost of production.

The Indian Pharmaceutical Alliance’s D.G. Shah says that the move to go back to the non-transparent, cost-of-production formula will wipe out the industry’s profitability by 80 per cent. It will sound the death-knell for the industry, he said, adding that domestic drug-makers will be forced to re-think investment strategies.

The Finance Ministry’s stand however, has been welcomed by pro-health groups. They have pointed out that price ceilings are based on the brand-value of medicine and not the cost of production, said Sakthivel Selvaraj, with the Public Health Foundation of India. Concern was also expressed on possible “escape routes” — allowing industry to avoid price-control by combining the drug with another medicine. The other objection raised by civil society and reportedly echoed by the Finance Ministry is the use of privately-provided data in formulating the public health policy.

The curious question though, is the timing of the Finance Ministry’s intervention, especially since the draft drug pricing policy has been under discussion for the last 12 months.

Published on November 20, 2012

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