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DoP seeks Law Ministry’s suggestion on drug pricing system

25 Oct 2012 Evaluate

With the continued efforts for the ceiling of Maximum Retail Price (MRP) for 348 essential medicines, the Department of Pharmaceuticals (DoP) has approached the legal affairs department under the Ministry of Law and Justice for taking legal opinion on interim order of the Supreme Court, which urged the government not to alter the current price mechanism for essential medicines.

DoP has sought the law ministry’s opinion about the legal provisions on apex court issuing directives to the government for following a particular methodology for pricing mechanism of essential medicines. The Supreme Court, with a view to avoid possibility of sharp rise in drug prices had recommended the centre to stick with the old pricing formula, which determines the price of the medicine by adding profit margin with the manufacturing cost.

The court’s directive came after the Group of Ministers, chaired by the Agriculture Minister Sharad Pawar approved the new pharmaceutical pricing policy to fix the retail price of 348 essential drugs  in the National List of Essential Medicines (NLEM) by calculating weighted average price of all brands in a segment that has more than 1 percent market share.

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