39 molecules likely to come under price band

The task force constituted by the Prime Minister to look into pharma prices has proposed to bring 39 molecules under the price-control umbrella and replace criminal liability with punitive penalties by putting a Drugs Act in place.

The current price regime consists of a Drug (Price Control) Order (DPCO) which comes under the Essential Commodities Act, 1955. The task force has recommended replacing stricter punishments like imprisonment with fines in the new Act.

Although the committee believes that putting 39 molecules under price control will constitute only 20 per cent of the 20,000-strong domestic pharma market, industry associations are still working out the repercussions. The list has been drawn up by applying the criteria of 2002 policy to 354 drugs under the National Essential Drugs (NED) List.

However, the price-fixing procedure, which involves submitting the cost data and working out an involved formula as specified in the DPCO, would remain unchanged, a source told Business Standard.

Besides these 39 drugs, presentations of 246 molecules covered by the ORG out of the 354 in the National Essential Drugs List will be subjected to "ceiling MRP", which can be calculated by taking the weighted average price of three (or five) leading brands.

For public procurement of these 246 formulations, 50 per cent of the "ceiling MRP" will be applicable. The current value of public procurement is estimated at Rs 3,000 crore.

All drugs will continue to be monitored by National Pharmaceutical Pricing Authority.

The task force still strongly backs the debranding of generics and price negotiations on patented drugs. Industry associations like Indian Pharmaceutical Alliance (IPA) have strongly disapproved the debranding exercise.

However, a time-bound process is likely to be instituted for selected drugs. As per this exercise, a product will carry the active pharmaceutical ingredient (API) nomenclature, along with the manufacturer's identification, to enable a consumer to choose the cheapest bio-equivalent alternative available.

For price negotiations on patented drugs, international prices and prices of therapeutic equivalent will be used as the reference price. A settlement commission will also be set up to review and resolve all DPCO cases.