Drug price cut a let down: Paswan

Reacting to widespread criticism of the "farcical" price cut on the 886 generic drugs, Union Minister for Chemicals & Fertilisers Ram Vilas Paswan has expressed disappointment over the industry's failure to take a substantive step in making the drugs affordable.

"They gave an assurance of a price cut on drugs. The ministry will speak to them as there has been a let-down," said Paswan while responding to reporters' observation that the 886 drugs were neither manufactured nor sold by the companies.

The list had been given only by 11 companies and not all. The episode had thrown up fissures even with the industry, he added. The list covers roughly 1 per cent of the Rs 33,000 crore domestic pharma market. It has been slammed as most drugs of common use remain outside its ambit.

The department of chemicals and petrochemicals "" the nodal administrative body for pharmaceuticals "" will be reviewing the industry's compliance with price cuts on the listed drugs for six weeks before bringing in a notification.

This will give it the backing of a regulation "" making it impossible to raise prices later"" as against what is essentially a voluntary industry move now.

In a separate move, the department will bring the generic drugs segment under the Drug Price Control Order (DPCO) and fix trade margins on them. The segment constitutes 7 per cent of the market and is promoted through trade channels directly.

"The 74 scheduled bulk drugs have trade margin caps of 8 per cent and 16 per cent for wholesalers and retailers, respectively, while branded generics have caps of 10 and 20 per cent, as per informal agreements. We will bring in the generic segment in the DPCO, which was the only aberration so far," said Satwant Reddy, secretary, department of chemicals & petrochemicals.

As part of other initiatives to make drugs available for below poverty line families, the department will be setting up a fund for drug banks across the country, as well as a cancer medicine assistance scheme.

"The cancer medicine fund will have a corpus of Rs 100 crore, while the drug banks will be partly funded by realisations from pharma companies that were fined for overcharging by the National Pharmaceutical Pricing Authority," said Reddy, adding that the details were being worked out.