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Paswan stays firm on wider price controls ahead of GoM meeting

Paswan stays firm on wider price controls ahead of GoM meeting
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First Published: Wed, Jan 30 2008. 12 05 AM IST

In public interest: Chemicals and fertilizers minister Ram Vilas Paswan. (Photo: Madhu Kapparath/Mint)
In public interest: Chemicals and fertilizers minister Ram Vilas Paswan. (Photo: Madhu Kapparath/Mint)
Updated: Wed, Jan 30 2008. 12 05 AM IST
New Delhi: A day before the third meeting of a group of cabinet ministers finalizing a new pharmaceuticals policy for the country, Union minister for chemicals and fertilizers Ram Vilas Paswan has said his ministry is firm on bringing in a broader range of drugs under mandatory price controls and he wants the new policy to become law soon.
In public interest: Chemicals and fertilizers minister Ram Vilas Paswan. (Photo: Madhu Kapparath/Mint)
At the Wednesday meeting of the so-called GoM, short for group of ministers, Paswan and senior officials of his ministry will present before the group a survey by drugs price regulator National Pharmaceutical Pricing Authority or NPPA which has found that prices rose just 1% yearly for those medications brought under control in 1994, while drugs that were taken out of price controls expanded by one-tenth annually.
Both Paswan and public health groups supporting a tighter price regime for drugs are hoping the GoM meeting will finally set the contentious policy—in the making for more than three years—off in the direction of the cabinet and bring under price control some 354 medicines identified as essential drugs by the ministry.
Currently, the prices of 74 chemicals that go into making medicines are controlled. Also in the reckoning are proposals such as the cancer assistance fund, countrywide drug banks and a health insurance programme.
“We have written to the Prime Minister twice to expedite the process because all of the recommendations are for the common man. We want that whatever has to be done should be done quickly so that the cabinet can take a view on it,” said Paswan in an interview. He is banking on a “general instruction from the Prime Minister’s Office to speed up work on all the pending GOMs” to get the policy approved by the GoM soon.
The seven-member GoM, headed by agriculture minister Sharad Pawar, is meeting after a gap of more than four months. The policy was referred to the group in January last year.
Drug price activist Amit Sengupta said he finds “the sense of urgency” missing in getting the policy through. “The industry is anyway comfortable with nothing happening or changing on this front,” he added.
The Indian drug industry is clear that it doesn’t want the new policy, in its current form, to become a law. Two industry executives, who declined to be quoted, said they prefer the current stalemate on the policy to its implementation.
Local drug makers say widespread price control will affect their profitability and make the business of price-controlled drugs unviable.
D.G. Shah, secretary general of industry lobby Indian Pharmaceutical Alliance, had said in his presentation at a September meeting of the GoM that the current policy would drag the industry profitability down to 1.4%—some 86% less than the current levels—and hit their ability to invest, export and even raise money from the markets.
Paswan countered this argument. “If a drug that costs 20 paise to the drug maker is being sold at a price of Rs37, how will price reduction cause losses to companies?” he asked, without elaborating which drug he was referring to.
The minister also defended NPPA’s rulings bringing about two dozen drugs under control by invoking a rule under the Drug Price Control Order or DPCO, the main pricing law for the local drug industry, that justifies such decisions in public interest. “Between 1998 and 2006, the power to exercise Para 10(b) was withdrawn from NPPA and we have reinstated it. We want to equip NPPA even more and that is part of the policy,” said Paswan. Para 10(b) is the public interest rule under the DPCO.
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First Published: Wed, Jan 30 2008. 12 05 AM IST