The Ministry of Chemicals and Fertilizers may push the draft pharmaceutical policy that calls for differential price control methods on all drugs included in the National List of Essential Medicines (NLEM) without further changes for cabinet approval. The Union Chemicals Minister Ram Vilas Paswan is known to have signalled such a move if the domestic pharmaceutical industry fails to prove that they have lowered the trade margins of generic drugs on a voluntary basis within two weeks.

Any move in this direction would be a set back to the industry that was trying hard for major changes in the proposed pharmaceutical policy. It would also mean the failure of its efforts to capitalize on the initial gains it made when the industry brought the minister to the negotiating table for a possible review of the draft policy.

The minister, who was planning to go ahead with his draft pharmaceutical policy, decided to slow down the process and also to make further amendments to the draft, after a crucial interaction with the industry associations where an offer for voluntary price reduction through a cut in trade margins of generic drugs was proposed by the industry. Consequent to the industry assurance, the minister had announced the decision to keep the draft policy in abeyance until a 14 member committee, majority of its members drawn from the industry, submitted its recommendations on three key issues of concern. In return the industry was to cut down the prices of generic drugs through a voluntary cap on the trade margins. Though generic medicines formed only an insignificant portion of domestic pharma business, the move was projected as a good will effort.

The draft review committee was supposed to submit its report on September 29, 2006.

Interestingly, the pharmaceutical industry in general and members of Indian Drugs Manufacturers Association (IDMA) in particular, failed to provide credible information about the quantum of price reduction that has been voluntarily taken place since the assurance. Though some of the leading domestic firms including few Indian Pharmaceutical Alliance (IPA) members and companies like Cipla Ltd and Nicholas Piramal India Limited submitted a list of products where price reduction had taken place, the overall effect was negative. Unless the industry works hard to clear up this mess, the minister is sure to go ahead with the draft pharma policy.

The minister is unlikely to hear the recommendations of the 14-member committee until the industry fulfils its commitment, sources informed.