Two policy changes Ram Vilas Paswan, the Union chemicals and fertilizers minister, has been advocating publicly soon after he took charge of the office had rattled pharmaceutical industry for some time. The first was his desire to bring more drugs under price control as he felt that several essential drugs are outside the DPCO. And the second was about regulating the high trade margins of generic drugs. The minister's stand was applauded by consumer activists as they felt that it was for the first time a minister is taking a pro consumer position. Collection of some market data on drug prices and trade margins at the instance of Paswan and his initial inaccessibility to industry leaders for talks have aggravated the fears of the industry further. But, suddenly everything started turning to industry's favour. Indian Pharmaceutical Alliance broke the ice first when D G Shah, its secretary general, met the minister and assured him a price freeze by all its 11-member companies till March 2005. What is the implication of this assurance is worth debating. Be that as it may, a softening of Paswan's posture has been visible since then. Last Friday's meeting of Paswan in New Delhi with heads of drug industry associations laid to rest all the fears of a tighter price control and margin roll back in this industry. He said very plainly at the end of the meeting that if the industry can observe price discipline, the government need not impose control on it. The industry leaders, probably, knew well that the minister was to turn 'realistic' sooner or later.
A total reversal of the minister's earlier stand in such short span was a bit of a surprise to some even in the industry. Industry leaders must have made their points clear to the minister: They have to make profit to remain in business and pharmaceutical industry being highly research oriented, profits have to be also higher. And this is possible only if there are no controls or least control in this industry. No one has any dispute over the industry's stand that it should make profits enough to reward its shareholders and to support its research and development activity. They should and they are indeed making such profits. What is happening in Indian pharmaceutical industry is a general lack of accountability even amongst top companies. The ongoing price violation cases of NPPA involving top companies like Cipla, Ranbaxy, Dr Reddy's and a dozen others is just one area. Offer of excessive margins to trade at the cost of consumer, off label promotion of certain drugs, continued marketing of internationally banned drugs and irrational combinations, etc. are other serious unethical practices the drug companies indulging in. All these are happening despite having government controls through various agencies in this industry. If that is the scenario today what justification the industry has to plead for a control free environment and the government to support it? Let the industry be responsible first and then the controls could be done away with.