The NGO has sought inclusion of more life-saving medicines of diseases like diabetes and TB in the list of drugs whose prices would be regulated by the govt. It said that the price control must extend to various “dosages, strength and combinations”
New Delhi : The Supreme Court termed the National Pharmaceutical Pricing Policy and the Drug Price Control order 2013 as “unreasonable and irrational” and asked the government to reconsider aspects like the formula to fix prices, and then pass a “reasoned” order.
“The Centre’s drug pricing policy seems to be unreasonable and irrational for fixing prices at the very high level,” a three-judge bench headed by Justice T S Thakur said. The bench asked the Department of Pharmaceuticals of Union Ministry of Chemicals and Fertilizers to pass a “reasoned” order on the representation of NGO, All India Drug Action Network, on the issue within six months.
It also asked the Centre to file a copy of its decision on the representation of NGO which would file it in six weeks. One of the five issues to be considered relates to NGO’s plea that MBP (Market Based Pricing) was never used for any price regulatory purposes and under the new policy, simple average ceiling prices were, in many cases, higher than the market leader price.
“You (Centre) are fixing the maximum price of a medicine above the retail price of the leading company of the same drug. It is absurd,” the bench observed during the hearing.
Colin Gonsalves, counsel for the All India Drug Action Network, the organisation that has filed the case, said the drug pricing policy of 1995 was much better than the current system. Under that system, the price of a drug was determined as the cost of production plus 100% mark up i.e. twice the production cost.
Gonsalves said under the new system, companies can charge as much as 15, 20, and even 40 times the production cost, and when such a price is fixed under the price control system, it is “institutionalising super profiteering in guise of price control”.
The bench, however, expressed reluctance to enter into the territory of drug pricing policy of the government saying “this is not an easy area for the courts to intervene and it is very difficult for a court to sit in judgement in such kind of policy matters.”
NPPA fixes price of 39 formulation packs
Meanwhile, NPPA has fixed the prices of 39 formulation packs including drugs used to treat diseases such as diabetes, infections, digestive disorders and pain among others.
