The long-pending pharmaceutical pricing policy, which was awaiting Cabinet approval, may now be reviewed by a group of ministers (GoM) all over again as the Prime Minister’s Office (PMO) wants it to address concerns raised by the finance ministry on the issue. Now, Finance Minister P Chidambaram, who is otherwise not part of this GoM, would be a “special invitee” to the ministerial panel, headed by Agriculture Minister Sharad Pawar.
The GoM, which formulated the policy, is now set to meet again on November 16 in the wake of concerns raised by the finance ministry on the draft policy submitted last month for Cabinet consideration, a source said.
The proposed policy, based on recommendations of the GoM, aims to cap prices of 348 essential medicines at the weighted average of all the drugs, in a particular segment, with more than one per cent market share.
However, the finance ministry recently expressed its strong opposition to the proposed policy and pointed at several loopholes in the recommendations made by the GoM.
In a note to the PMO, the Cabinet Secretariat and Department of Pharma, the ministry said, “The current system, which is a cost-plus system, is adequate to cover all legitimate costs for a manufacturer, particularly when the costing is being done annually”.
The finance ministry also pointed out that under the proposed mechanism, various low-priced drugs might become expensive because there were many formulations in the market, including those by multinationals, where the price of the product predominantly reflected the brand value associated with it and it was unnecessary to link prices of such products with others.
Following this, the proposal was also taken off the Cabinet meeting agenda last week.
The finance ministry’s observations are significant because the Supreme Court, during one of its previous hearings, had also observed that the government should not change the existing pricing mechanism.
The Cabinet Secretariat had earlier directed the Department of Pharma to seek supplementary views from the law ministry and the finance ministry on the proposed policy in the light of the observations made by the apex court. While the law ministry gave a green signal to the proposal saying framing a policy is the prerogative of the government, the last minute concerns raised by the finance ministry has again put the policy on the back burner.
The policy is pending since 2003 and even after repeated slamming from the SC, the government so far has failed to arrive at a consensus on the mechanism to regulate prices of essential medicines in the country.
The apex court, which had sought a definite deadline from the government for fixing a pricing policy in connection with a case, is scheduled for the next hearing on November 27.
However, to meet the deadline, the GoM will necessarily have to arrive at a consensus in its November 16 meeting and place the matter in the Cabinet in the coming week.
