Pharma task force proposals may shake up industry

Pharma pricing task force favours regulating prices of 35-40 per cent of the drugs and de-branding Schedule H prescription drugs.

The recommendations, if incorporated in the Drug Price Control Order (DPCO), will unsettle the industry as the schedule H prescription drugs constitute over three quarters of the market.

"A brand assures quality and imposes responsibility on the producer. If that is stripped of, price will be the only thing to compete on. The quality will take a beating and consumers will be the worst sufferers," said Cipla Joint Managing Director Amar Lulla.

Harinder Sikka, corporate affairs president at Nicholas Piramal, said it would be "a blow bigger than the DPCO 1979 (which de-branded many drugs), and is bound to start a wave of spurious drug manufacturing in the country."

Task force head Pranob Sen admitted, "The implementation will be a bigger issue".

An industry expert said fixing the ceiling MRP on the basis of the weighted average price of the three top selling brands by value "could cost us 10-15 per cent of the top line".

Industry players hope that the provision of supplying patented drugs at half the price for government procurement would be optional and that the report gets rejected. The industry seems to be intent on fighting and lobbying on the issue.

President of the Organisation of Pharmaceutical Producers of India and the Managing Director of Novartis, Ranjit Shahni believes that the government is barking up the wrong tree by focusing on price control. He adds that because "drug prices in India are already the lowest, availability of medicines is more vital than affordability".

Lulla adds, "We need a body to promote health and not control the industry. We need collaboration and not policing."

The only hope for the industry is the suggestion to reduce excise duty from 16 to 8 per cent to level regional imbalances. It may reduce prices for consumers.

To the industry's charge that task force recommendations are anti-competitive, Sen retorts, "My job is not to make Indian pharma industry competitive..that was not in the terms of reference."