Public interest groups fighting for feasible price mechanism will submit a detailed affidavit to prove how the new pricing policy has adversely affected the drug prices, before the Supreme Court which agreed to evaluate the new policy and the Drug Price Control Order (DPCO) 2013.

In response to the Apex Court direction last week, the NGOs including All India Drug Action Network (AIDAN), LOCOST, Medico Friend Circle and Jan Swasthya Sahyog are gathering inputs to make a detailed comparative analysis of essential medicines and the impact of the ceiling of prices. The affidavit will be filed when the case comes up for hearing next, sources said.

Supreme Court while hearing the plea by the AIDAN last week said it would 'test' the new National Pharmaceutical Pricing Policy and the DPCO. The bench headed by Justice G S Singhvi observed that the government was being guided by market-driven forces.

AIDAN in its application had sought quashing of both the 2012 policy and DPCO 2013, which would reduce prices of 348 essential medicines, notified by the Department of Pharmaceuticals (DoP) on December 7, last year and May 15, respectively.

“We stick to our stand of reversing to the cost-based pricing mechanism from the newly-adopted market based pricing. It is difficult to gather the prices of all drugs as the Government does not share the data it collects from IMS,” a spokesman for the NGOs said while urging all concerned stakeholders to pitch in with their comments and inputs.

AIDAN told the court that the new policy, which puts a ceiling on drug prices based on average market prices, would lead to a higher cap than the earlier one and the new policy will “institutionalise the super profits” made by pharma companies.

Denying that the new policy will lead to higher drug prices than before, the government said that the 2012 policy bars companies selling cheaper drugs from raising their prices significantly. Additional solicitor general Siddharth Luthra submitted that there is nothing wrong with the policy and there is a difference in retail and bulk prices of medicines.

In an earlier petition, the NGOs had pointed out that profit margins with the new ceiling prices are over 1000 per cent in many cases. Also, the DPCO 2013 simple average ceiling price is higher than DPCO 1995 price by over 1000 per cent in five of the 18 drugs studied. For instance, in the case of atorvastatin 10 mg, which is used to reduce cholesterol, the market leader price is Rs.97 per 10 tablets, whereas the price according to cost-based pricing under DPCO 1995 norms with 100 per cent margin would have been Rs.5.60, while the simple average price (of brands more than one per cent market share) is around Rs.59.10 per 10 tablets, they contended.