Though mentioned in the draft pharmaceutical pricing policy 2011, the government is unlikely to rush to a decision on the price negotiation mechanism of imported patented drugs as it is 'still examining' the report by an expert panel in this regard.

After debating and deliberating about proposing a price negotiation mechanism for patented drugs for six long years, the panel submitted an inconclusive report recently. However, a decision is unlikely soon as the government was still grappling with the issue of pricing policy of essential drugs and it does not want to further antagonize the industry.

When contacted, the sources in the Department of Pharmaceuticals (DoP) said it was 'examining the report of the panel' and would take an appropriate decision in time.

“The committee mentioned in its report that in case of reference pricing the prices of the product are fixed on the basis of the prices in other similarly placed countries and in case of Price Negotiation model, the prices are fixed after negotiations with the manufacturer,” sources said.

The draft policy had promised to address the matter. “There is a separate committee constituted by the government order dated December 21, 2006 for finalizing the pricing of patented drugs, and decisions on pricing of patented drugs would be taken based on the recommendations of the committee,” it said.

Besides, the Parliamentary Standing Committee attached to the Chemicals Ministry last year had called for treating the issue on a priority basis. “The Committee feels that the issue at hand is too urgent to be left open-ended and, therefore, recommends that DoP resolve this issue within a period of six months. The Committee would also like the Department to put in place an effective mechanism to enable the use of international price benchmarks in such cases and limit the price of an imported drug by comparison with the price of the same drug in other countries and thus check windfall profits made by importers on selling imported molecules at exorbitant prices in the country,” report of the panel said.

At present, there is no system of price negotiation for patented drugs in the country. Under the provisions of the Drugs Price Control Order, 1995, the prices of only 74 bulk drugs and formulations containing any of these scheduled drugs are controlled. In March this year, Indian Patents Office had invoked compulsory licensing permitting Hyderabad-based Natco Pharma to manufacture and sell cancer-treatment drug Nexavar at a price, over 30 times lower than charged by its patent-holder Bayer Corporation.