The multinational pharma companies in America, Europe and Japan have expressed strong apprehension about the Indian attempt to broaden the price control through a new pharmaceutical pricing policy, saying that it would not achieve the goal of expanding access to medicines and would instead stifle innovations.

“We believe that the draft national policy needs further review and consideration in a few important areas. For a number of reasons, we believe that the new proposal to further broaden government price control from 20 to 60 per cent of all medicines in the country will not achieve India’s goal of expanding access to medicines and in fact may likely to have the potential to stifle biopharmaceutical innovation in India, without which Indian patients may not benefit from the introduction of new medicines,” they said.

The American, European and Japanese biopharmaceutical firms under the banners of the Pharmaceutical Research and Manufacturers of America (PhRMA) and the European Federation of Pharmaceutical Industries and Associations (EFPIA) made these observations in response to the new draft of the policy.

“The government pharmaceutical pricing policies should adequately reward innovation. While India has a large and strong generic pharmaceutical presence, the industry has not yet become innovative, despite the stated desires of both the government and industry to do so. With the further burden on expanded government price controls, it is unlikely that this will change or that local industry will be able to make that shift,” a joint representation from them said.

“Innovation in new medicine development is both costly and risky. Government price controls have the potential to limit margins and hence revenues of companies, therefore restricting the ability of manufacturers to spend scarce resources on research into new medicines. Small and medium enterprises with a desire to develop new and better medicines to treat diseases impacting the Indian population may be hesitant to make the necessary investment of time and money if they suspect their medicines will be subject to government price controls in the future if deemed essential. They simply cannot garner sufficient reward for their innovation to make the risk worthwhile,” they said.

“With already some of the lowest prices in the world, additional government price controls in India may further undermine India’s nascent state of innovation. A similar phenomenon of depressed innovation can be seen across other countries with extremely low government prices and heavy price controls (eg, Turkey and Brazil),” the organisation said.

“For the poorest segments of the population, medicines are not affordable at any price. Those who have the greatest needs will derive little or no benefit from price controls. Additionally, the ability of cheaper (even free) medicines to improve healthcare is greatly limited by lack of access to doctors, diagnostics, and hospitals beds,” the response said.