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Drop prices or you’ll be made to, govt warns pharma firms

Drop prices or you’ll be made to, govt warns pharma firms
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First Published: Mon, Apr 16 2007. 12 16 AM IST
Updated: Mon, Apr 16 2007. 12 16 AM IST
Mumbai: India could increase the number of drugs for which it fixes prices under the Drug Price Control Order (DPCO) from 74 to 354—the number of essential drugs according to the government—if pharmaceutical companies did not keep their promise to reduce prices, according to the Union minister for chemicals, petrochemicals and fertilizers, Ram Vilas Paswan.
Last year, the government had fixed the wholesale and retail margins on around 1,000 branded generics (off-patent drugs) at 15% and 35%, respectively.
The prices of these drugs are not determined by the National Pharmaceutical Pricing Authority (NPPA), which enforces DPCO.
The margins on some of these were as high as 1,000% before the government’s order, which was expected to result in a significant reduction in prices of drugs from October onwards.
Some of the companies hadn’t yet complied with this order, said Paswan.
“The government is supportive of the growth of pharmaceutical industry. At the same time it cannot allow the patients to suffer due to unaffordable prices,” he added.
The pharmaceutical industry’s representative said any further reduction in prices would hurt the industry.
“A further squeeze in prices will definitely affect the profitability of companies,” said D.G. Shah, general secretary, Indian Pharmaceutical Alliance, a trade body that represents top Indian drug makers.
Last week, NPPA issued a notice the country’s second-largest drug maker Cipla Ltd, levying a Rs748 crore fine for allegedly overcharging customers on five of its drugs in the past. The matter was already being heard by the Supreme Court when NPPA issued the notice.
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First Published: Mon, Apr 16 2007. 12 16 AM IST
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