The Union ministry of chemicals and fertilisers has once again taken up the issue of bringing some price discipline in pharmaceutical industry as the new drug policy has been indefinitely delayed. Statutory price control is currently only on 74 drugs and their formulations although the ministry can regulate prices of all other drugs falling outside price control as per the DPCO, 1995. But, the National Pharmaceutical Pricing Authority has been rather passive in monitoring prices of decontrolled formulations despite several unjustified price hikes of several essential medicines which are currently outside price control. The ministry has been receiving a number of complaints about such price hikes of decontrolled formulations for some time. At last, it has asked the NPPA to monitor prices of non-scheduled formulations on a regular basis if the price hikes exceed 10 per cent in a year. Companies will be shortlisted if they are found to be raising price of a non-scheduled formulation by more than 10 per cent during 12 months period and the annual turnover of the formulation pack exceeds Rs 1 crore. The share of the formulator in that segment of formulation should also be at least 20 per cent of the market or the medicine has to be one of the first 3 top medicines of that therapeutic group. The manufacturer will be asked to furnish reasons for such price hikes and will be directed to bring down the prices voluntarily if such hikes are found unreasonable.
Although price discipline is most wanted in pharmaceutical products, excessive pricing and large scale price violations are more taking place in this sector than any other industries in the country. Detection of such overcharging and unfair trade practices is a very slow process as NPPA does not have a state wise or region wise price monitoring machinery. By the time, NPPA finds a price violation or excessive profiteering in a product, patients might have been already fleeced for several months. This is what has happened in the past ten years and NPPA is still fighting in various courts of the country to collect Rs 700 crore for overcharging of controlled drug formulations from more than 20 companies. Now, with the new patent law in place, the threat of monopoly pricing of patented products is emerging. Several multinational companies are in the process of introducing a number of patented drugs into the Indian market soon to cash in on the amended Patent Act. These companies are learnt to be lobbying hard with various government agencies to ensure that no restrictions are imposed on the pricing of patented drugs. It seems that has not worked. The ministry of chemicals has decided to have a system of price negotiations for all patented drugs before they are allowed to be marketed in India. The government has taken a right decision in this regard as there is every possibility of excessive pricing of patented drugs although many of these products may not have any novel therapeutic values.