The pharmaceutical companies who were worried over the plans of the Prime Minister's Task Force on pharmaceuticals to recommend compulsory de-branding of selected drugs has received support from the most unexpected quarter. The representatives of the non-governmental organizations who met the taskforce headed by Dr. Pronab Sen, Principal Advisor (PP), Planning Commission, were these friends who also felt the importance of "brand names" in drug industry.
In their response to the task force, the NGO representatives said that brand name has a value for assuring the quality of a product. They also disagreed with the task force's suggestions to call for reference prices based on the institutional prices quoted by the companies and toed the industry view that "taking the tender prices as the basis for monitoring the prices in the market may not be fruitful as in general quality or quantity or both are compromised to quote minimum figures in tender." The observations of the NGOs should make domestic drug units happy as they had also been trying hard to drive the same point.
Another area where consumer groups and industry associations joined hands was in demanding less or nil taxation on drugs. While industry associations like Indian Drugs Manufacturers Association (IDMA) and Organisation of Pharmaceutical Producers of India (OPPI) had informed the task force about the 37% tax component in drug MRP, the consumer organizations wanted this to be removed. They felt that "taxation has to be seen in the light of consumer need so that the extent of burden on consumers will be taken into account while imposing any tax." Introduction of graded trade margin was also suggested by the NGOs.
The NGOs wanted the government to share the responsibilities of price monitoring with the civil societies. The task force is known to have agreed to the suggestion and said that civil societies have an important role to play in monitoring the prices of medicines.
The task force chairman has preferred the setting up of a public procurement system for diseases related to poverty or rural areas.
The NGOs are to prepare a detailed set of suggestions to be submitted before the task force.
The task force has also completed initial round of talks with the industry representatives. Apart from Indian Pharmaceutical Alliance (IPA), all other major associations were present for the hearing. According to industry sources, the industry attempted to keep the task force abreast of the ground realities in drug business. They also argued that the task force should look at healthcare expenditure in a holistic manner and should not attempt to control only the prices of drugs, which constitute a minor portion of the total expense. The issue of multiple taxation was also raised in the meeting.
With the task force deciding to have more interaction with the civil society leaders and the industry, the final report is likely to be delayed by few weeks now.
As Pharmabiz had reported earlier, the recommendations of the taskforce is of much importance as the government needs to frame a new Drugs Price Control Order that can pass the scrutiny of the Supreme Court. This situation arose after the SC stayed the previous DPCO, which brought down the list of price controlled drugs.
The Task Force had in its previous meetings opined that the existence of DPCO under the Essential Commodities Act cannot be justified as it is meant for controlling the prices of commodities like rice, wheat, coal etc and does not suit for medicines. It had also noted that an effective monitoring of essential drug prices is not possible under the current system, as it would require a huge administrative system. The committee is known to be in favour of tracking the prices of medicines at two levels, one at the retail level and other at the first point of sale. The prices offered by the companies for institutional sales may also turn handy for the authorities while calculating the drug prices.