According to this report from Economic Times, “the government will negotiate prices for imported medicines for identified diseases based on prices of the same medicine in other markets and the cost of production estimated by it, an official said. For other imported patented drugs, the companies would be expected to voluntarily keep prices lower in India.“
There are already price control norms in place in India, but loopholes in the regulation offer a lot of leeway to imported brands. Specifically, the National Pharmaceutical Pricing Authority (NPPA), which controls drug prices in India, is unable to keep tabs on the production cost of imported drugs. Currently, it relies on the manufacturers’ stated production cost, from which the retail price of the drugs are derived. See this formula for more details, and the ET report .
The purpose of this new pricing regulation is to ensure that essential medicines do not get caught in the monopoly pricing loop, and are instead available at affordable rates.
Government has been in talks with industry over this, and the report tells us that “while the MNCs are ready to negotiate prices for essential drugs, they want to restrict it for government’s bulk procurement programme and supplies to government hospitals.”
Elsewhere, GlaxoSmithKline (GSK) in a Guardian interview, which I shall post on later, has indicated that the company is willing to negotiate on the prices of its drugs. It will be interesting to see how this pans out from an industry perspective, and whether others actually pick up the gauntlet.
In an unrelated, but perhaps relevant, piece of news, the second phase of the Jan Aushadi project (24X7 generic drug stores) is now under way, with stores in the NCR and Punjab, and is expected to be scaled up nationwide by 2012, if it runs per schedule. Note the ‘if’. The proposed implementation plan for the project is ambitious to say the least – it takes four months to go from one district to about half a dozen, and another year to cover a whole state (the rest of the states are unnamed/undecided); and the whole 600+ districts in the country will be covered in the remaining 24 months.
Will we see more election sops coming our way? Counting down to April-May 2009.
Dear Sumathi
Thanks for this post.I would like to know one thing that it would affect CL provision in India specially price related option in whihc local manufacture can argue on this basis . Infact recent Roche Vs cipla have the same issue although Cipla Defence lawyer did not give much importance to price later.
I request you or shnmad please give your comment on this issue or write down a blog on implication of this development on CL
Thanks & Regards
Anaon-I