The All India Organisation of Chemists and Druggists (AIOCD) has urged the government to urgently finalize the new drug-pricing policy to dispel the uncertainty presently prevailing in the drug market and benefit the patient fraternity and the industry at large.

In a letter to the chairman of group of ministers on national pharmaceutical pricing policy (NPPP) Sharad Pawar, AIOCD reiterated the need for a market-based drug pricing policy to best address patient needs and balance industry growth as envisioned in the draft NPPP 2011. The trade body has pointed out that there is general uncertainty in the market that hurts patients and the industry as a whole. If the policy is finalised at the earliest, the clouds of uncertainty would ultimately disperse.

The AIOCD in its letter said that the weighted average price (WAP) of all brands (having more than one per cent market share by volume) is the best formula as it takes into account almost 90 per cent of the cumulative market share under price control (formulations as listed in the NLEM) by value in comparison to around 60 per cent taken into account by the WAP of Top 3 brands. The WAP of All Brands formula will result in more patient savings on NLEM formulations than the WAP of Top 3 brands formula, besides being the simplest, most balanced, transparent formula.

“AIOCD believes that market-based pricing would balance patient as well as industry interests, while preventing formulations going off the market on account of an unviable manufacturing environment – as happened during the cost-based pricing regime. IMS data shows that a third of the molecules (26 out of 74 molecules) under cost-based price control as per DPCO 1995 have either been discontinued or had production shifted to other countries such as China. Some examples are methyldopa and doxycycline, used in the treatment of hypertension and urinary tract/other infections. Market-based pricing would also facilitate an environment that attracts more companies to the market, further intensify competition and provide more options for patients,” the letter said.

The Organisation is also of the opinion that non-essential strengths, dosages and combinations not specifically listed in the NLEM 2011 should not be included in the scope of the policy because such a move would burden the industry and stifle growth, adversely impacting the availability of essential medicines. Adequate safeguards are required to prevent prices of lower-priced drugs from moving upwards towards the ceiling price by combining the formula with a price cap. This will make it a foolproof pricing mechanism, it further said.