Stirring up a fresh debate on the ambit of the price control, the Parliamentary Standing Committee attached to the Ministry of Chemicals and Fertilisers has recommended 'initial price fixation' of all non-scheduled drugs to cut down the huge margins now enjoyed by the pharmaceutical companies.

In what may annoy the pharma industry which is already displeased by the new Pharmaceutical Pricing Policy, the panel suggested that the National Pharmaceutical Pricing Authority (NPPA) should monitor the initial price fixation of all the drugs by the companies, instead of the current practice of monitoring the annual hike in the non-scheduled category.

“The Committee is disappointed to note that though the prices of scheduled drugs/formulations are fixed by the Government/NPPA, there is possibility of huge difference between production prices and sales prices of non-scheduled drugs in which case only annual increase in prices is monitored by the NPPA. Hence, the Committee recommends that the NPPA/Government should also monitor the initial price fixation of all drugs by the companies so that there will not be huge difference between the actual production cost of medicines and its retail price by various manufacturers. The Committee also recommends that NPPA should devise norms regarding such initial price fixation by pharma companies so that the practice of gold plating can be curbed,” a recent report by the panel said.

The committee had in its earlier report also cited the instances of huge difference between the production price and sale prices of medicine and had called for a tab on the companies to make sure that the sale price did not exceed beyond a reasonable rate.

“The Committee in its earlier recommendation had stated that the Department of Pharmaceuticals should keep a tab on the production prices of medicines by different companies and ensure that the sale prices of medicines do not exceed beyond a reasonable rate. In this regard, the Committee have been informed by the Department of Pharmaceuticals (DoP) in its Action Taken Reply that NPPA from time to time by notification in the Official Gazette fix the price of Scheduled formulations in accordance with the formula laid down in para 7 of DPCO, 95 keeping in view the cost or efficiency or both of major manufacturers of such formulations and such price operate as the ceiling sale price for all such packs including those sold under generic name and for every manufacture of such formulations,” the report said.