The Centre has come out with a formula to fix the price of medicines set to lose their patent exclusivity. 

The move will help streamline the pricing of innovative medicines, an industry representative said, adding that the off-patent price would be capped at 50 per cent of its original cost. And after a year, when generic versions of the drug would be available, the price would be capped using the present formula — that is, an average of all the similar versions with a one percent market share. In case of an innovative drug, not available in India, an expert committee would decided the price-cap, an industry expert explained.

A Department of Pharmaceuticals notification of Friday said, “In the case of scheduled formulation of its molecules or components or ingredients, which are patented under the Patents Act 1970 (39 of 1970), the ceiling price on expiry of the patent shall be revised by reducing the present ceiling price by 50 per cent, and after one year, the ceiling price shall be revised as per the provisions of subparagraph (1) of paragraph 4, based on the market data of the preceding month.”

An industry representative said the move will allow streamlining of prices in line with the competition in the market. Civil society representatives, still grappling with the impact of the notification, said the notification appeared to give generics a margin to increase their prices. The usual pattern for drugs going off patent is that their price erodes by about 90 per cent.