Drug price control in limbo

Panel to discuss which of the price-control mechanisms for drugs could suit Indian needs.

The issue of drug price controls has been put on the backburner, for the time being. The Sandhu Committee, which was set up to examine the ambit of price control, failed to meet its December 2004 deadline.

And, with the Prime Minister's Office setting up a task force to study other options to make essential drugs available to the common man, the report might not come out in a hurry, sources in the ministry of chemicals and fertilisers indicated.

"The government's policy over the past two decades has been to reduce the span of price control. The number of drugs under price control has come down from 347 in 1979 to 74," a source in the chemicals and fertilisers ministry said, indicating the likely course of action.

The Sandhu Committee, meanwhile, is still in the process of discussing which of the price-control mechanisms for patented drugs in countries like France, Canada and Australia could be modified to suit Indian needs.

In September 2004, a delegation of industry heavyweights representing companies like Ranbaxy, Wockhardt and Nicholas Piramal India had met the Prime Minister to apprise him of the situation, shortly after Ram Vilas Paswan, the Union minister for chemicals and fertilisers, threatened pharmaceutical companies with price curbs. This is reported to have been one of the triggers behind the setting up of the task force.

"In a scenario where the government emphasis is on options other than price control, the Sandhu committee's recommendations may be rendered redundant. Moreover, with price control becoming a sensitive issue, the committee would rather wait and see what the task force has to say," the source said.

The task force has been asked to submit its recommendations by February. Joint Secretary G S Sandhu, who heads the price-control panel, is also a member of the task force.

Even the order fixing retail margins in the pharmaceuticals trade may not be implemented in its present form. Various industry sections have been lobbying against the order and the government has referred it to the law ministry foreseeing legal problems in implementing it.

Senior officials in the ministry believe that increased price control based on the basic components of medicines may not really benefit the common man as pharmaceutical companies are likely to change the ingredients once the brand is established in the market.

Panel impasse

• The JS Sandhu Committee, set up to examine the ambit of price control, failed to meet its December deadline
  
  
• The panel is still in the process of discussing which of the price-control mechanisms for patented drugs could be modified to suit Indian needs
  
  
• With the task force appointed, the committee may adopt a wait and watch policy
  
  
• The task force has been asked to submit its recommendations by February. Sandhu is also a member of the task force