Drug firms want say in new pharma policy

Under the banner of Confederation of Indian Industry (CII), domestic drug majors have approached Cabinet Secretary BK Chaturvedi for being allowed to present their views on the new pharmaceutical policy, scheduled to be discussed by the Union Cabinet on Thursday.

The appeal, signed by Ranbaxy CEO Malvinder Singh and Nicholas Piramal Chairman Ajay Piramal, states that industry's recommendations to the 14-member review committee for the pharma policy "had been totally ignored by the ministry."

"There is no need to increase the span of drugs under price control. A short-term freeze on the price of controlled products and an efficient price monitoring regime thereafter would ensure the availability of affordable healthcare," it stated.

In a separate move, FICCI President Habil Khorakiwala has written to Prime Minister Manmohan Singh on the issue. "FICCI is apprehensive that industry may be forced to curtail the production of drugs because of unremunerative prices. This will result in inaccessibility of medicines for many consumers," the letter says.

Khorikawala, the chairman of Wockhardt Ltd, said the proposed policy would reinstitute the licence raj by introducing controls over the production, distribution and supply of drugs, even those not under price control.

The Indian Pharmaceutical Alliance (IPA), a select group of R&D intensive Indian companies, has blamed the ministry for pushing ahead a policy proposal against its interests.

"Some of the policy proposals are inconsistent, arbitrary and open to litigation," said D G Shah, secretary general of IPA. "The 74 drugs under current price control are based on the "economic" (market share and competition) criteria of the 1994 policy, whereas the 186 drugs now being brought under price control are based on the "essentiality" concept.

The earlier 74 drugs will be allowed maximum allowable post manufacturing expense (MAPE) of only 100 per cent, whereas the new 186 drugs will get 150 per cent. The list of 186 drugs includes 45 from the earlier list, but they will be denied the higher rate of MAPE," he explained.

Even the Planning Commission has pointed out that "the most important part of the policy is to extend price control and expand the basket of controlled drugs from 74 at present to 354 drugs under the National List of Essential Medicines. Such a step could prove to be counter-productive as it would discourage new investment and limit competition. It might curtail profits and constrain research."

Though the Cabinet will take up the policy for discussion on Thursday, a decision on the issue is highly unlikely.

Sources said the decision may be deferred or the matter may be referred back to the chemicals ministry for re-consideration. Another possibility is of it being referred to a group of ministers.