Department of Pharmaceuticals replaces Committee for Patented Drug Price Reduction with Successor after Six Years


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It has been almost seven years since the Government of India, under the aegis of the Department of Pharmaceuticals (DoP), had established a committee tasked with framing a mechanism that would serve to bring down the price of patented medicines within the country by way of negotiation and/or reference pricing. Considering the exorbitant pricing that some of the patented drugs are subjected to, this move was certainly a laudable one, aimed to provide much-needed affordability to especially the life-saving medicines. However, in a rather unexpected and unwelcome move, the government has decided to finally dissolve the committee and also reject the report that it had submitted in February, 2013.

The committee had originally come into being through a memorandum in February, 2007, comprising seven members including the Chairman and representatives from the DoP, the National Pharmaceutical Pricing Authority, the National Institute of Pharmaceutical Education and Research, the Pharmaceutical Export Promotion Council of India and the Drug Controller General of India. Although it was initially asked to submit a report within three months of its constitution, it took almost six years to achieve the same, taking recourse to a rather prolonged process of holding at least twenty meetings with stakeholders from NGOs and industry associations and consultations with the Federation of Indian Chambers of Commerce and Industry. The committee had also commissioned the Rajiv Gandhi School of Intellectual Property Law, IIT-Kharagpur to carry out a comparative analysis of the various price control mechanisms in vogue in other countries. Given its long tenure of the existence, the committee also saw as many as three chairmen (consecutive DoP directors)!

Some of the prominent suggestions that the 2013 Report contained include linkage of patented drug prices to the prevailing prices in countries like the UK, Canada, France, Australia and New Zealand and then adjusting the price keeping in consideration India’s purchasing power parity vis-à-vis those countries. Some of the committee members had apparently also traveled to some of those countries, like Canada and Australia, as per a Business Standard report, although in this age of informational freedom, one may wonder whether to obtain that was really essential to obtain the relevant information. The seriousness and commitment of the committee have rightly been questioned by several people in light of this huge delay in carrying out its mandate, which merely allowed the mass to bear the burden of exorbitant prices and the adverse impact of monopolistic exploitation for even longer.

As an industry expert has been reported to have told the Business Standard, the issue of high priced patented drugs has been allowed to fester since long, a situation akin to the Drug Pricing Policy and the government had even excluded patented drugs from within the ambit of the National Pharmaceutical Pricing Policy, on the pretext that this committee was working on faming a whole new sui generis policy for patented medicines.

However, DoP officials have said now that the reason for scrapping the committee and its report was owing to the changes in market dynamics and in the market shares of pharmaceutical companies, which have collectively rendered the committee’s findings outdated. The dissolution has also been followed by the establishment of a new inter-ministerial committee with four representatives each from the Ministry of Commerce and Industry, Ministry of Health and Family Welfare, National Pharmaceutical Pricing Authority and one from DoP to examine this issue all over again.

While there is no doubt that the issue is sufficiently important not to be left in the lurch without being examined altogether, one wonders what good these committees are expected to serve if by the time they are ready to come up with an observation, the world and market reality have left them so far behind as to render their suggestions moot. One can only hope that the current committee will meet with a fate less ignominious than its predecessor.

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