Last week another meeting of the Group of Ministers on the issue of pricing of essential drugs in the proposed pharmaceutical policy ended up with no conclusion as there was no consensus. The GoM headed by the Agriculture minister Sharad Pawar has thus decided to hold fresh consultations with the stakeholders. Now, when the consultations will take place with the stakeholders and whether there will be any agreement within the GoM are two questions which have no clear answers now. Consultations with the stakeholders and within GoM have been going for the last several years with no result. The main task of the GoM, set up in 2009, was to finalise a mechanism to control the prices of 348 essential drugs in the draft policy based on suggestions made by the stakeholders so as to make medicines affordable to vast majority of the people. The previous GoM on pharmaceutical policy, set up in January 2007, was also headed by Pawar. It had held four meetings between 2007 and 2008 but could not make any acceptable recommendations. The last meeting was held in April 2008. The subsequent meeting of the GoM was expected to finalise the policy but that never happened. It was this ongoing delay in announcing the pricing policy that had motivated the public interest groups to move the Supreme Court. Preparation of National Pharmaceutical Pricing Policy by the Department of Pharmaceuticals and the first meeting of the new GoM now are results of this judicial intervention.

Broadly there are two clear positions on the issue of pricing of drugs and they are known. One is that of pharmaceutical industry which wants no price control on drugs based on its argument that competition will bring down the drug prices. Industry has never explained how that theory works in this industry when physicians actually decide what brand of medicine the patients should buy for treating diseases. Industry also argues that India has the one of the lowest drug prices in the world although it has never attempted to substantiate this point. All major industry associations representing multinationals and large Indian drug companies have one stand that there should be no changes in the method of price fixation and the span of price control on drugs as proposed in the draft policy. DoP had suggested that pricing of 348 essential drugs specified in the draft policy should be based on the weighted average prices of the three best selling brands of any product having same strength or combination. By proposing this, the policy seeks to discard cost based pricing of formulations. The Union health ministry and the Planning Commission have taken objection to this position of the DoP on the ground that such a pricing policy can defeat the very purpose of making available the essential medicines at reasonable prices to the common man. An expert group under the Planning Commission is of the view that the prices of essential drugs should be capped with reference to the lowest formulation sold in the market. The positions of the Health Ministry and the Planning Commission reflects the point of view of the patient community and health activists. Fixing prices of formulations based on market prices can actually push up the prices of most of the dosage forms from the current levels and may benefit only drug companies. Prices of most of the essential and widely used generic and patented drugs in India are already expensive because of the current ineffective drug pricing policy.