High Court asks industry, Govt to resolve pricing issue
This is even as the Delhi High Court on Thursday asked the Centre and the pharmaceutical companies to resolve the drug pricing issue.
According to an NPPA order, besides the 43 drug formulations brought under the control regime, prices of 20 medicines were revised. These drugs had been brought under price control earlier. Last month, 56 drug formulations were brought under the price control regime.
The 43 drugs that were brought under the control regime include the BCG vaccine (which also falls under the public-funded Universal Immunisation Programme), antibiotics such as ciprofloxacin HCl and rifampicin (used to treat tuberculosis), and cardiovascular medicines like acetyl salicylic acid.
Monopoly issues
According to the NPPA, several drug producers, such as Lupin, Cadila and Cipla, had a monopoly on many of these drugs. When a company holds over one per cent market share for a drug, it is considered to have a monopoly.
Bringing more medicines under the price control regime has resulted in friction between the Government and the pharmaceutical industry, resulting in litigation. Industry associations are currently tied up in legal battles with the NPPA over price control which, the industry says, will make it unviable to produce and distribute some of these medicines.
“We are weighing our options for exiting production of some of these medicines included in the essential medicines list,” a senior executive of a pharmaceutical company said.
Can take price-cuts
However, Sarabjit Kour Nangra, VP-Research (Pharma, Angel Broking, said, “It is not like pharmaceutical companies are not in a position to absorb these price cuts. Especially since the DPCO (Drug Price Control Order) has a provision of increasing prices depending on WPI inflation (now under 4 per cent).”
She added that while the industry is likely to see some short-term volatility in the market, the long-term impact is not likely to be significant.
“The idea is to come up with a market-linked formula which results in a decent mechanism of drug pricing with minimum price variations. And the industry will have to take it since it is under the law,” Nangra said. Business Line
