The Centre's proposed model, being drafted by a high-level panel, to fix prices of imported drugs through negotiations has failed to enthuse many of the pharma industry associations, mainly the small scale sector, and public interest groups who expressed apprehension about the success of the planned mechanism.

The panel, headed by deputy secretary in the pharmaceutical department, recently met the representatives of a number of NGOs, consumer organisations, and some pharmaceutical associations like SPIC and IDMA to brief them about the draft proposal to fix prices of drugs patented outside the country and being marketed here. However, it is learnt that the public interest groups were skeptical about the plan as it would not ensure the desired end result of making drugs affordable.

The proposal is to set up a permanent mechanism by appointing a panel headed by a joint secretary and comprising nominated experts who would take the views of other stakeholders including the public interest groups to negotiate and fix prices of imported drugs, whose alternatives are not available in the country, before giving marketing approval.

The suggestion under the proposal is to fix maximum lowest prices in the world, dividing them into two categories. The prices for imported drugs to be supplied to the public health facilities and national health programmes thus will be fixed between 40 to 70 per cent lower than the original prices. Accordingly, lowest prices will also be negotiated for the retail marketing of these drugs as the second category, it is learnt.

However, the small scale industry feels that it would not be effective as the multinationals can take other routes to defeat the cause since the marketing approval for the same is given by the DCGI office. Likewise, the public interest groups pointed out that similar price negotiation mechanism framed by Brazil and Thailand also failed in the past.

Before going for compulsory licensing in some cases, the two countries tried to implement price negotiation but failed to yield desired results. The patent laws had given scope for compulsory licensing and if the prices are fixed through negotiations and that become unaffordable to the common people, the government will have no further option to check the multinationals. Thus the safeguards allowed under the patent laws become less effective, an expert pointed out.

The committee, comprising officials of NPPA, department of industrial policy and promotion, health ministry and the industry, will be meeting the representatives of NGOs, associations and consumer organisations again on April 27 to discuss the ways to plug the loopholes and hammer out a more effective mechanism in this regard.