Regulating drug prices has been a major initiative of the Central government for more than last 45 years as prices of most of the essential and life saving drugs remained beyond the reach of common man. And with that intention, the government introduced price control on essential and life saving drugs from 1970 onwards. But, the price control had never worked effectively in the country because of frequent violations and circumventions of Drug Price Control Order by most of the pharma companies. This is despite genuine efforts by the National Pharmaceutical Pricing Authority in enforcing the provisions of the DPCO. But the worst phase in controlling drug prices started after the amendment of the Indian Patent Act in 2005 facilitating MNCs to freely sell patented drugs in the domestic market. It is more than six years now the government has been trying to bring some control on prices of patented drugs marketed in the country. After the introduction of product new patent regime in 2005, MNCs have been applying for patents for a large number of drugs for marketing in the country. Some of these drugs for treating life threatening diseases and are being sold at exorbitant prices as the government has not been able to bring them under price control. The patented drugs are expensive on account of excessive profiteering, loading of huge trade commission and promotional costs. Apart from excessive pricing of patented drugs, MNCs have been also claiming patent rights for products which are not actually new molecules. These companies have been filing applications for patenting different forms of the same drugs, like salt, polymorphs, analogues, crystalline and combinations with other drugs.
First serious attempt to regulate prices of patented drugs was made by the Department of Pharmaceuticals last year when it came out with a draft policy on pricing of patented drugs based on the report of an expert committee on price negotiations for patented drugs. The Committee also felt that prices of patented medicines in the country are quite high considering the low per capita income and purchasing power of the people. The Committee, therefore, wanted to have a reference price for patented drugs to start with and further negotiations with the concerned companies for a final price of the product. The Department was in agreement with the report of the panel but wanted the concurrence of all stakeholders before finalizing the policy. As the response from the stakeholders was very slow and diverse after several months of waiting, DoP has now decided to set up an inter-ministerial committee of joint secretaries of different ministries to look into the issues and suggest ways and means to fix the prices of patented drugs. DoP's latest move bringing members from related ministries and departments could perhaps help to finalise a better policy framework for this critical area. What is equally important is the finalisation of the pricing policy at the earliest as several thousands of poor patients are already paying high prices for the patented drugs.