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Why shift in drug pricing policy: SC asks Centre

Why shift in drug pricing policy: SC asks Centre

New Delhi: A bench of Supreme Court headed by Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud recently asked the government to explain the reasoning behind its shift from cost-based drug pricing policy to market-driven drug pricing policy while fixing the prices of more than 370 essential medicines.

The bench observed that the market-driven formula seemed patchy and could be misused while directing the government to file a comparative chart on prices at which Tamil Nadu and Rajasthan were buying the same medicines.

The Supreme Court further observed that drugs were not the sunglasses and the market-driven pricing of essential drugs was irrational as it was based on averages. The court also said that market-driven pricing was dependent on so many factors, including demand and supply.

The decision was taken by the government after a senior counsel Colin Gonsalves for the petitioner, All India Drug Action Network (AIDAN) put the big difference in market-based pricing of drugs and the prices paid by Tamil Nadu and Rajasthan for procuring them in front of the court.

AIDAN raised questions on the National Pharmaceutical Pricing Policy (NPPP), 2012 and the Drugs (Prices Control) Order, 2013 as the government switched to market-driven pricing policy after the introduction of NPPP, 2012.

Putting their comment in front of the court, Gonsalves said market-based pricing is simply based on averages and had no correlation with the cost of production.

Alleging before the court that market-based pricing amounted to legitimising profiteering by pharmaceutical company, Gonsalves said the cost-based determination of prices took into account all inputs, including packaging and transportation.

Source: with inputs from IANS
3 comment(s) on Why shift in drug pricing policy: SC asks Centre

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  1. When we are talking of pricing is the NGO as well as the government factoring the quality of the product and the compliance to cGMP by the manufacturers. If not then it’s like comparing and apple to an orange. We call ourselves the Pharmacist to the world and so it High time that there is complete compliance to the cGMP requirements which are are stipulated in Drug Act. Otherwise not only in India but even in the world we will slowly and steadily loosing credibility for our pharma products.

  2. Drug Price Control will kill the indian Pharma Industry . Pressure on medicines prices will result in poor quality medicines. if medicines quality is to be kept at par with international standards, then price control should be abolished and let it be driven by market forces. If you check the history of all the medicines which were covered under DPCO , They were vanished from market . End of the day the public suffered.
    Yes, If the govt. purchases the large quantities through tenders and distribute them , then the prices can be brought down but then all chemist shop will be closed and unemployment will be increased.
    I suggest that public should be educated at large enabling them to select generic or cheaper branded medicines to buy as per prescription of doctor. 1mg is a good app to find a cheaper medicine with same ingredients. If people will start buying cheaper medicines then costly medicines suppliers will be forced to reduce their prices. Sometimes the chemists offer only costly medicines . for this , some mechanism should be made by govt. which will force them to keep cheaper substitutes to offer the buyer. Otherwise now cheaper medicines are available online.

  3. user
    Dr. M. K. Gajera October 9, 2017, 8:47 am

    The policy change appears to be because of the reason that the present government wants to favour multinational companies at the cost of poor patients of this country. The cost of production in India is quite low compared to the cost of production in developed countries, which by way of nexus of politicians and officers concerned is being misused to benefit the said companies as well as themselves.