The Organisation of Pharmaceutical Producers of India (OPPI), representing a group of multinational pharma companies, has urged the department of pharmaceuticals (DoP) to reconsider its decision to bring bulk drugs and intermediates out of the purview of price control in the National Pharmaceutical Pricing Policy 2011 (NPPP 2011).

In its comments on the draft NPPP-2011, OPPI said, “OPPI strongly urges the reconsideration of para 4(2) recommendation that price regulation would not apply to any upstream products such as bulk drugs and intermediates. We have a strong apprehension that there will be a significant increase in prices of bulk drugs/APIs after their price controls are lifted. Moreover, there will be a time lag between increase in cost of bulk drugs/APIs used as inputs for finished formulations and the price neutralization of input costs can only be taken at the end of the financial year based on price index. OPPI, therefore, recommends the same treatment for price increase for 348 bulk drugs as done in case of formulations viz. the same per cent rise as given for formulations”.

Besides, the OPPI also urged the government to place the imported drugs in a separate category as they argued that imported products have different cost structures and are not comparable to locally manufactured drugs. Imported formulations included in NLEM 2011 should be placed in a separate category and a separate ceiling price should be fixed for them. Normally imported formulations have a price higher than indigenous equivalents due to their higher landed cost, and if they are clubbed with indigenous ones, the common ceiling price will be pushed up higher, which may not be desirable, it said.

OPPI also asked the government to raise the exclusion criteria from the proposed Rs Rs.3 per unit to Rs.5 per unit. “Rs.3 per unit is too low a price as an exclusion criteria. The Pharmaceutical Policy, 2002 recommended a price of Rs.2 per unit as exclusion criterion. This was nearly 10 years back and hence needs to be aligned with the current income levels. Average per capita income in 2003 was Rs.17,947. In 2011, this figure is Rs.54,835. Even considering the affordability criteria based on the per capita income, the prices for exclusion criteria could be fixed at Rs.6. However, industry recommends Rs.5 as the average per unit cost, for the purpose of NPPP 2011, it said.