314 bulk drugs under price control

The Prime Minister's pharma pricing taskforce in its final report has recommended controlling the prices of 314 bulk drugs under the National List of Essential Medicines. It has also proposed the debranding of generic drugs sold under prescription, especially of those enjoying a near-monopoly in the market.

The draft report of the taskforce, headed by Pranob Sen, the chief adviser to the Planning Commission, had talked of price control over 354 bulk drugs and debranding of all generics.

In spite of the relaxation, about 35-40 per cent of all the drugs will come under price control if the recommendations find their way into the pharmaceutical policy and the Drug Price Control Order. All the formulations based on these bulk drugs will also be under price control.

The final report was submitted to Chemicals and petrochemicals Minister Ram Vilas Paswan in New Delhi today.

The 40 bulk drugs under the National List of Eessential Medicines (NLEM) left out of the price control list are those procured primarily by hospitals. The list is to be revised every five years "" the first revision is scheduled for 2008.

Among the suggestions put forth by the industry during the consultations, the government accepted the one advocating the sale of patented drugs at half the price during government procurement. The suggestion to put a freeze on prices was rejected.

"We will procure essential drugs from the industry at 50 per cent of the price and give it free to those who can't afford them," Paswan said.

About rejecting the price-freeze suggestion, Pranob Sen said, " Earlier, the companies used to find a way to circumvent this by changing the name, formulation or making a 150 mg tablet into a 200 mg one or vice versa. It ensured nothing against such loopholes."

The ceiling price as per the weighted average formula constituting the top three brand players has been retained in the final report. However, the taskforce seems to have yielded to the industry stance and has changed the criteria of choosing top players by value (for prices as on April 1, 2005) and not by volume.

In case of 10 per cent hike per year in the price of any essential drug, the regulatory bodies will have to call the company and negotiate price fixing.

Debranding will be confined to prescription-drugs and especially to the ones with a non-competitive market structure. This will be defined as any single company having 70 per cent or more market share, by volume and clear indications that competitors were not coming in. As many as 18 therapeutic areas, which are crucial as per Indian disease conditions,have been identified for purposes of "intensive monitoring".