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November 5, 2006: The issue of drug price control is getting controversial, and the pharma industry does not see eye to eye with the Union Chemicals and Fertilisers Minister on the issue. What transpired is the clash of business logic and political sentiments. Indian pharma industry leaders see the price controls as overly intrusive even as some among them saw in a planned new policy a return to some kind of nationalisation.
According to the Union Minister, there is still a wide gap between reasonable prices and affordable prices in India where almost 30 crore of its population lives below the poverty line.
Significantly enough, the price control issue is making a comeback ever since the minister had accused the industry of “breach of trust” last week for going back on its assurance to voluntarily reduce prices of generic drugs manufactured after October 2 this year.
Indian pharma industry leaders however said that they were not going back on that promise made. Requesting more time to make that effective, they said that they expect the prices of generic drugs to come down by January.
They added that they never said that they would not bring down the prices. While large companies have announced a reduction and submitted a list to the Indian government, there are more than 20,000 companies in India that produce drugs. The government may think of bringing out guidelines but at the same time it should not enforce a notification, the industry pointed out.
The pharmaceutical industry has submitted to the government a list of 886 drugs on which it would impose a cap of 15 percent on wholesale margins and 35 per cent on retail margins.
The main culprit here in this issue is the proposed national pharmaceutical policy, which is seen as not in tune with industry growth with all the regulations and pricing control mechanisms proposed. This is de-facto nationalisation of the private sector with all government controls, feel the industry players.
A 14-member committee of government officials and industry representatives is examining the draft pharma policy and is expected to submit its report by the end of this month.
BY OUR PHARMA CORRESPONDENT
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