The Union Minister of Chemicals, Fertilizers and Steel, Ram Vilas Paswan delivering the keynote address at an Interactive Session with States Finance/Health Ministers on pricing and availability of medicines, in New Delhi on August 18, 2004

The state health ministers have rejected the proposal of the union minister of Chemicals and Fertilizers Ram Vilas Paswan to waive / unify the local sales tax levied on drugs in their respective states. The ministers from majority of the states who attended the interactive session called by the C & F Minister here felt that any immediate changes in the sales tax structure of drugs will cause revenue loss to the states and thereby not feasible. With this the attempts of the minister for a uniform price regime for drugs across the country will be delayed, until the Value Added Tax system is in place at the national level.

While the union minister was attempting for a consensus among the states to evolve a common strategy to tackle the problem, the states wanted the matter to be taken up at the level of Union Finance Minister or Prime Minister and the Empowered Committee of State Finance Ministers. The issue relating to the wide difference between wholesale prices and retail prices of non-scheduled formulations was also discussed. It was agreed that the state drug control authorities will look into the issue and where they found a high trade margin in non-scheduled formulations, especially those used in critical diseases like AIDS, Cancer etc, they should impress upon the manufacturers concerned to reduce the prices and also bring such cases to the notice of NPPA.

Later, in an interaction with the media, Ram Vilas Paswan informed that NPPA has been given instructions to strictly monitor the prices of all drugs that has a turnover of more than Rs one crore. All drugs with a turnover exceeding Rs 4 crore will automatically come under price control.

The fate of the Pharma Policy 2002 and its DPCO with a lesser span of price control was also a subject of discussion. Among the states present, Uttar Pradesh, Bihar, Himachal, Goa etc were for bringing more number of drugs under price control. The state of Punjab, however, preferred to differ strongly with the views of the central government. In their representation, representatives from Punjab questioned the credibility of the survey based on which the assumptions of the level of price increase were calculated by the C & F Ministry. The Punjab representatives said that the centre should not bring more drugs under price control if the problem is with trade margins. "It can be solved only through consultations with the industry and the trade associations. One should not make the mistake of bringing all the drugs under the price control as it cannot solve the problem of trade margins," they said.

The states opposed C & F minister's plan to ask pharmaceutical companies to mention the ex-factory prices and along with the MRP on the medicine packs.

The need for strengthening and streamlining the functioning of the state health directorates / drug controllers so as to make them a more effective instrument for the enforcement of laws / regulations governing the production and sale of pharmaceuticals in the country was also highlighted.