Concerned over the impending pricing policy aimed at regulating the prices of 348 essential medicines, Industry has urged the Government to focus on adopting an evidence based and balanced policy to make available essential drugs to all. Most importantly industry wants the government to take the cost of manufacturing as an important factor for formulation pricing as it will help to ensure reasonable prices.
Indian Pharmaceutical Alliance (IPA) along with other stakeholders in a joint representation has demanded to the Government for a better solution on drug pricing so as to address and examine the issue of regulating prices of 348 drugs along with other major issues concerning the pharma industry. The industry fears that if the proposed draft gets accepted, it will bring 74 per cent of the drugs in the market under price control from the current 18 per cent.
Addressing the apprehension on the implications of the new pricing policy D G Shah, secretary general, Indian Pharmaceutical Alliance (IPA) stressed that if this proposal on price control gets cleared then it will seriously impact the availability of drugs covered under the NLEM leading to scarcity in the supply of drugs in the market. He added, “The new DPCO which is coming after almost 15 years should not be price variant as it will affect the industry which in return will have serious implication on the accessibility of the medicines to the general public. If this draft is adopted, pharma companies will be forced to stop the manufacturing of these medicines as it will not be viable for them to go ahead with the cost of manufacturing of these medicines.”
Shah pointed out that the government should take some lessons from the after effects of DPCO 95 which resulted in large number of companies from discontinuing the production of many drugs in the price control list. “When overall the pharma industry has shown a very strong growth, there have been strong indicator pointing to the decline in the growth in price controlled drugs over the decade. It is important to note that only 47 out of the 74 controlled drugs are currently produced in the country, whereas many companies have either limited or completely stopped producing 27 price controlled drugs as they did not give any margin to the company,” he said.
He further stressed that all the industry demands is that the government should consider the stakeholders demand for evidence based balanced policy which is prepared after detailed analysis or model of prices based only on validated data.
He pointed out, “There is a lack of transparency on why this price control has been adopted. Moreover while formulating the policy, the Government has not taken into consideration or recognised the actual manufacturing cost that a company has to incur. Industry has to get raw materials from different sources wherein the procurement cost varies from company to company. However the government has not taken these factors into consideration while formulating the new drug pricing policy. These factors needs to be considered if the government wants to ensure that prices of the medicines does not impact the access and sustained availability of the same to all.”
Other key issues affecting the industry that the association plans to discuss includes demand for a better regulatory infrastructure in the country that is both transparent and accountable in its functioning. Special focus will also be given on ways to promote entry of generics and how to encourage innovation in the country.