Even as apprehensions grew about the fate of the draft national pharmaceutical policy and the possible pricing formula, the Planning Commission is learnt to have recommended capping the prices of essential drugs with reference to the lowest formulation sold in the market.

After studying the draft National Pharmaceutical Pricing Policy (NPPP), prepared by the Department of Pharmaceuticals (DoP), an expert group under the Planning Commission has reportedly objected to the market-based pricing formula based on the average prices of the three top selling brands in the market, sources said.

“The National Pharmaceutical Pricing Authority (NPPA) should be transferred from the Ministry of Petrochemicals to Health, since the subject matter of price control of drugs is aimed at making medicines accessible to patients. While the case for cost regulation of all medicines on the Essential List is unmistakable, the cost should be fixed with reference to the lowest priced formulation in the market, instead of that with the largest market share as has been proposed in the draft NPPP, 2011,” said a note by the panel prepared ahead of finalising the Plan document for the 12th Plan.

The Health Ministry also had opposed the formula suggested by the DoP in the draft, saying that capping of the essential drugs should be based on the average price of the three cheapest brands in the markets. This was also supported by a number of public interest groups which rejected the market-based pricing model.

In view of the widespread objections by the stakeholders, the DoP itself has reportedly dropped the very idea of market-based pricing and is learnt to have decided to go back to old cost-based pricing, with mark-up price.

Meanwhile, still uncertainty continued about the fate of the very draft policy itself, as the Group of Ministers (GoM) failed to meet and take up the draft for consideration yet. Though the GoM, headed by Agriculture Minister Sharad Pawar was expected to meet last month and later early this month, the meeting was deferred.