Prices of 354 drugs may be cut

Industry associations have suggested price cuts on another 354 drugs if the government switches from price controls to a system of monitoring.

The 14-member committee constituted by Union Minister of Chemicals and Fertilisers Ram Vilas Paswan to thrash out issues in the pharmaceutical policy has suggested up to 10 per cent voluntary cuts in the prices of these essential drugs, which constitute around 40 per cent of the turnover of the Rs 33,000 crore market in reciprocation to the government moving towards price monitoring.

"The industry associations have assured us that price reduction of these drugs will be undertaken, after which price caps will be put in place by the government. The formula is still being worked out," said an official from the department of chemicals and petrochemicals. Price monitoring might include setting a price band in which prices could move on a yearly basis, added the official.

Confirming that such a proposal was being negotiated, the Indian Pharmaceutical Alliance's DG Shah said: "It is part of a composite package. If the government agrees to a cost monitoring model, the industry will reduce the prices of these essential drugs."

An official from the Indian Drug Manufacturers' Association also said such a move was afoot. "These drugs do not attract trade margins of 1,000 per cent so the price fall will not be as high as with the 886 generic-generic medicines. But it will cover 40 per cent of the market and all the essential medicines," he added.