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Govt approves new drug pricing policy to cap 348 essential drugs under control

23 Nov 2012 Evaluate

With an objective to streamline the regulatory framework for pricing of drugs to ensure their availability at reasonable prices, Government of India has given approval for a new drug pricing policy- National Pharmaceutical Pricing Policy. The move will curtail prices of costly brands sold by domestic and international drugmakers in a market that already has rock-bottom medicine prices, analysts and industry officials are skeptical about the benefits of the policy.

The policy aimed at bringing 348 essential drugs under price control, was earlier approved by the Group of Ministers (GoM) on September 27 and was subsequently sent to the Cabinet. According to industry experts, the new policy is expected to cover up to 30 percent of the total drugs sold in the country. At present, the government through the National Pharmaceutical Pricing Authority (NPPA) controls prices of 74 bulk drugs and their formulations. Earlier, GoM, headed by Agriculture Minister Sharad Pawar proposed to fix prices based on weighted average of brands which have more than 1 percent market share.

However, during last month, the Supreme Court had set a deadline of November 27 for the government to finalise the policy while asking it not to alter the existing mechanism of cost-based drug pricing. The government has also considered providing sufficient opportunity for innovation and competition to support the growth of the Indian pharma industry. The policy, however, took long to finalise due to differences between ministries of health and chemicals and fertilisers.

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