India’s domestically-owned pharma industry has told the government it supports its price regulation plans, with certain exemptions.
Currently just 74 bulk drugs are price-controlled in India, but the government is proposing to regulate the prices of all 348 products included in the new national list of essential medicines (NLEM) – covering around 60% of the retail market – and also to go further, bringing a total of 1,154 drugs and 6,441 formulations, accounting for around 75% of the market, under price control.
In its comments on the government’s proposals, the Indian Pharmaceutical Alliance (IPA), which represents the domestic manufacturing sector, has estimated that implementing the domestic price reductions set out in the policy would lead to a revenue loss for the industry totaling 30,000 billion rupees.
However, the industry group adds that the proposed medicines procurement allocations also contained within the draft legislation – the National Pharmaceuticals Pricing Policy (NPPP) 2011 – would create significant growth opportunities for the industry, as central medicines purchasing at discount could be expected to increase as much as sevenfold.
It also welcomes Ministers’ plans to exempt bulk drugs and intermediates from price control, pointing out that around 70% of the domestic industry is currently buying these products from China and that the move woulf encourage local production.
But the IPA also warns the government against extending the scope of price control beyond the 348 drugs on the NLEM, pointing out that adding so many other products would “enlarge the scope of price regulation by over eight times the current volume to about 68,000 packs, making the task unwieldy and ineffective.”
Also, by increasing the list of controlled drugs without basing their selection on sound reasons of health policy, the move could threaten the NLEM’s goal of promoting rational use of medicines, the Alliance tells Minister. The plan would also work against the government’s stated objective of providing sufficient opportunity for innovation and competition to support the growth of the domestic industry, it adds.
The industry group proposes to the government that it should support local innovation by exempting from price control indigenous research products which are patented in India for a period of 10 years, and that products with novel delivery systems should be exempted for seven years.
The government says it will finalise the draft policy after it has received comments on its proposals from all stakeholders.
