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Ministerial panel seeks price control for 348 essential drugs

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The ceiling price of a drug would be calculated by taking the weighted average prices of all the drugs which have a market-share of more than 1 %.

Mumbai : A Group of Ministers headed by Agriculture Minister Sharad Pawar approved a proposal to bring 348 essential drugs under government control, a move which may help reduce prices of these medicines. At present, the government controls prices of 74 drugs through the National Pharmaceutical Pricing Authority (NPPA).

The ceiling price of a drug would be calculated by taking the weighted average prices of all the drugs which have a market-share of more than 1 per cent, Fertilisers and Chemicals Minister Srikant Jena said.


“There were three-four option present in front the GoM but I think broad agreement has been made on the option of one per cent market share…,” Jena said.

When asked if it would be mandatory for the doctors to prescribe generic drugs, Jena said: “The health ministry will look at it … more number of generic drug shops will be opened in the country”.

The GoM’s proposals would be sent to the Cabinet within a week for the final clearance to bring the 348 essential drugs in National List of Essential Medicines (NLEM). These drugs with sales of around Rs 29,000 crore account for about 60% of the domestic market.

“We have finalised every thing today. Now it will go to the Cabinet and the Cabinet will take the final view. We will send it in a week’s time,” Pawar told reporters here after the meeting.

The new policy, if approved, would regulate prices of about 27 percent of the total drugs sold in India, Nomura said in a note.

Shares in drugmakers like GlaxoSmithKline Pharma, Ranbaxy Labs, Cadila Healthcare and Dr Reddy’s are expected to see price corrections if the policy is finalised, Nomura said.

However, Tapan J Ray, Director General Organisation of Pharmaceutical Producers of India (OPPI) said that the new proposal will have adverse impact on the industry, as the span of price control will now cover around 30 % of the Indian pharmaceutical market with further squeeze in the margin.

Indian Pharmaceutical Alliance’s secretary general DG Shah said, “The industry has lost one year’s growth. It will hurt all major companies, particularly the large 100 domestic and foreign companies. The silver lining is that it is a balanced policy and will ensure both access and availability.”

Apart from Pawar, Sharma and Jena, other members of the group include Health Minister Ghulam Nabi Azad, Minister for Communications and IT Kapil Sibal, Law Minister Salman Khurshid and Planning Commission Deputy Chairman Montek Singh Ahluwalia.