Karnataka Drugs and Pharmaceuticals Manufacturers Association (KDPMA) is upset about the government efforts to cut prices of drugs without taking the pharma industry into confidence.

The Association represented by a section of the pharma industry said that while such price cuts would benefit the patients, there was also need to see the state of affairs of the industry which was engaged in the manufacture of these medicines. A big handicap for the industry is the provision in the DPCO 2013 order which states that prices of drugs which are slashed could not be taken off the production line.

The state’s pharma industry comprising large, medium and small enterprises have been vociferous over the price cut of the 108 formulations issued by National Pharmaceutical Pricing Authority (NPPA) issued on July 10, 2014. This time, the major drugs are cardiovascular, hypertension and diabetes which all companies manufacture and form a key factor contributing to the earnings.

According to Jatish N Sheth, president, KDPMA and director of Srushti Pharmaceuticals, the government has gone beyond its mandate and not adhered to the Supreme Court order calling to maintain the price cuts of drugs coming under the National List of Essential Medicines (NLEM).

The first thing the government should do in the event of price cut of pharmaceuticals is to bring the industry into confidence, discuss and deliberate before imposing the order. Attempts towards price cuts of drugs are for the benefit of the patients. But from an industry perspective, the whole process to bring down the drug prices should be open and transparent, added KDPMA president.

According to Sunil Attavar, secretary, KDPMA and managing director, Group Pharmaceuticals, it is important for the industry to have a dialogue rather than put up with such out-of-the- blue announcements from the government. The pharma industry in across India is not clear on the path it should take. Current economic uncertainty and the slow down have again created an indecisive environment on whether to expand or not. In the case of the NLEM, industry had devised strategy to improve efficiencies in purchase. But now these drug price cuts are disturbing and are making future unclear.

There is anxiety for the industry chiefs on which product to focus and expand. This price cut order has created jitters not just for small companies but even drug majors. It is forcing companies to put investments for expansions on hold. “Therefore, we hope the government realizes our situation to initiate a dialogue with the pharmaceutical industry to have a voluntary reduction of drug prices in certain therapy areas”, pointed out Attavar.

“It looks like pharma industry would have to put up with the price cuts because it’s a national policy. As per the mandate of Supreme Court and  Government, the NLEM drugs are under price control and NPPA has the authority to invoke special provisions in certain rare cases, like if the drug was a monopoly or under patent. Price could be brought down if there was an abnormal price hike by companies. But now it looks like the NPPA has used its discretionary powers arbitrarily. The impact of the price cut is huge going by the wide range of drugs coming under the NPPA surveillance. The future is difficult for the pharma industry,” said Harish K Jain, treasurer, KDPMA and director, Embiotic Laboratories (P) Ltd.