Mumbai: The All India Organization of Chemists and Druggists (AIOCD), the country’s largest drug retail lobby group, has joined the debate over pricing, maintaining that all the 348 drugs under the national essential drugs list should be brought under price control by taking the weighted average price of all brands in the market instead of just the top three.
“At a time when the drug manufacturing industry is facing challenges on multiple fronts, the WAP (weighted average price) of all brands formula will result in a greater impact on the industry in comparison with the WAP of top three brands formula proposed in the draft NPPP (National Pharmaceuticals Pricing Policy) 2011 to best meet access, affordability, innovation and quality needs of patients,” said AIOCD president J.S. Shinde on Monday.
AIOCD represents about 5.5 lakh drug traders from 27 states across the country.
The drug lobby All India Organization of Chemists and Druggists wants to change the way medicine prices are set. Mint’s C.H. Unnikrishnan discusses why this has become such a contentious issue.
The draft pharmaceuticals policy is under consideration of a group of ministers headed by agriculture minister Sharad Pawar. Drug pricing has been a contentious issue with the department of pharmaceuticals and departments of health and family welfare locking horns on the pricing method.
The absence of a consensus among these two government agencies is delaying the policy.
The department of pharmaceuticals had in December proposed that a new market-based price control system be introduced in the country by taking the average price of the top three brands in each therapeutic segment, thus shifting from the conventional cost-based approach.
The department of health, on its part, argued that the country should continue the cost-based system as a market-based system would lead to a price increase, especially if the average price of top three brands is taken to arrive at the controlled price.
AIOCD, which has now joined the debate for the first time, supports an all-brand pricing method, reasoning that it takes into account almost 90% of the cumulative market share under price control by value as compared with just around 60% taken by the average of the top three brands.
“The association is of the opinion that market-based pricing would balance patient as well as industry interests, and prevent formulations going off the market on account of an unviable manufacturing environment as happened during cost-based pricing regime. It will also facilitate an environment that will attract more players to the market, further intensify competition and provide more options to patients,” said Shinde.
According to the chemists’ body, over the last two decades, patients in India have suffered on account of the non-transparent and complicated cost-based pricing regime, which has hampered patient access to essential medicines.
“Many therapeutically efficacious and cost-effective medicines such as Methyldopa and Doxycycline used in the treatment of hypertension and urinary tract and other infections, respectively, have become unavailable due to cost-based price control, and eventually disappeared from the market,” Shinde said.
The national pharmaceuticals policy, that was last revised in 1995, has had only 74 drugs under the price control regime.
The policy revision, though proposed several times afterwards to expand the span of price control, got mired in legal challenges.
The current revision was initiated after a Supreme Court intervention last year and following a recommendation in September from lawmakers.