New pharma policy to unveil dual pricing

The Ministry of Chemicals and Petrochemicals is looking to put into place a dual system of drug price control in the upcoming Pharmaceutical Policy and Drug Price Control Order (DPCO).

The new price control regime would have about 35 bulk drugs that would continue to be under the cost-based formula, as devised by the National Pharmaceutical Pricing Authority under Pharmaceuticals Policy, 2002, while as many as 279 drugs would come under the weighted average formula.

A taskforce headed by Pranob Sen had suggested that a ceiling price be calculated by top three pharma brands by value as a benchmark and this be applied to 314 bulk drugs which come in the national list of essential medicines. "The government is applying this to only 279 bulk drugs, leaving the other 35 under the old regime," said an industry expert.

Joint Secretary, Ministry of Chemicals and Petrochemicals, G S Sandhu said, "Yes, we are thinking about it. Such a thing is under discussion."

Those drugs that have sales of more than Rs 30 crore and one company with a share of more than 50 per cent or with sales more than Rs 15 core and market share exceeding 90 per cent of one player, have been placed under the old regime," he added.

However, respite is in store for pharma companies who were resisting any attempts by the government to tighten price control. Even out of the 279 drugs coming under the price control umbrella, those with more than 10 formulators or companies in the fray may not come under any form of price control at all, according to one school of thought within the ministry.

This may net out another 110 drugs from the list as they would be assumed to 'have adequate competition'.

A 'special access programme' was also proposed by the Sen Taskforce for anti-cancer and AIDS drugs, may also find its way into the policy.

As many as 42 drugs are believed to be in this category which shall attract no excise tax from the government, traders would be asked to reduce their margins while companies would supply the drugs at concessional rates.

'These 42 too will be kept out of the price control umbrella, reducing the list to 127 bulk drugs. Offering drugs at 50 per cent of the MRP by companies has also been made optional', said another industry source.