CONCERNS OF INDUSTRY
Editorial www.pharmabiz.com
P A Francis

The Part B of the new drug policy draft is with the government for some time now. When that will be notified or whether it will be notified in its present form, is something only time can tell. What is giving sleepless nights to the industry is the proposal to bring in 354 drugs, indicated in National List of Essential Medicines, under price control. The government move to bring in 354 drugs under control is as per a direction issued by the Supreme Court some time ago. The new policy is expected to provide a 150 per cent MAPE (Maximum Allowable Post Manufacturing Expenses) on the ex factory costs of the formulations of the 354 drugs. The government thinks that the increased MAPE should be adequate to take care of the industry and trade margins. In the 1995 Drug Price Control Order, MAPE granted for 74 drugs was only 100 per cent. Although there is going to be MAPE based ceiling prices for all the 354 drugs, price fixation of most of the formulations may be done by the manufacturers themselves. NPPA should be fixing the prices of only a few essential drugs out of the 354. But there is going to be regular monitoring of prices of all 354 drugs by NPPA. Industry bodies are objecting to the very idea of expanding the control to 354 drugs at this stage. According to them, the new policy is a retrograde step and is reminiscent of the 1979 DPCO in which 347 drugs were under control in 4 categories.
The government has been reducing the span of control on pharmaceutical industry after the 1979 DPCO was strongly opposed by the industry and subsequently scrapped. A new DPCO with just 120 odd drugs was then notified in 1987. The 1995 DPCO reduced the control further to 74 drugs. Industry expectation of a new drug policy now with a lesser number of drugs, therefore, is just normal. But it seems that the chemicals ministry is in support of the Supreme Court's view that there should be broader surveillance on drug prices as there has been large scale violations of drug prices fixed by the NPPA in the past. Ram Vilas Paswan, the Union minister for chemicals & fertilisers has recently told the Parliament that the pharmaceutical industry owes Rs 694 crore for overcharging various drug formulations during the last 10 years. Several major companies figure in the NPPA list of violators. The practice of contesting government price fixation orders and overcharging of essential medicines are still prevalent in this industry. Take a look at what is happening in Himachal and Uttaranchal. Even with no excise duty, drug units in these states selling drugs at prices much higher than units which pay excise in other states. Such profiteering needs to be strictly curbed. The government's move to have control on 354 drugs with a 150 per cent MAPE is with this concern of the patient community. And the 150 per cent MAPE on the ex factory cost of the medicines is adequate to take care of the industry's profitability too.

Courtesy : www.pharmabiz.com
14.6.2006

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