Govt does not rise to Pfizer's price bait

The government has refused to accept a proposal by Pfizer, the world's largest drug company, for supply of drugs to the government at cost prices if the industry is freed of price control.

The multinational giant's Chairman Henry A Mckinnell made the proposal to Prime Minister Manmohan Singh and the Ministry of Chemicals and Fertilisers earlier this month.

The Pfizer proposal was in line with its global strategy. Early this year, Pfizer came out with similar proposals in the US and South Africa, offering certain drugs at concessional rates and even for free.

Pfizer India Managing Director Kewal Handa, who accompanied Mckinnell on his visit to the PMO, told Business Standard that the company was prepared to make its drugs available to the masses at even lower than cost prices if "the availability and affordability" of medicines were an issue in health care in India.

"The real issue in the Indian context is 'accessibility' and not 'affordability' of medicines. In the absence of proper health infrastructure, price control alone will not help in improving health care. It is the government's responsibility to create adequate infrastructure to resolve the problem and price control is not the answer to this," Handa said.

Describing the response from the concerned ministry as "disappointing", he added, "the government has to realise that pricing is not exactly the problem the country is facing. In fact, there has been only one to two per cent increase in prices of drugs over the last few years."

Despite supplying drugs at cost prices to the government, Pfizer would not have incurred losses as it would have saved on marketing and promotional costs.

A section of the industry is advocating monitoring of drug prices by the government instead of price control under the Drug Price Control Order.

Analysts said the industry would be encouraged to introduce innovative products and invest in R&D in absence of direct governmental control of prices.