No decision yet on bringing essential drug under price control

The group of ministers (GOM) had held four meetings but did not make recommendations on bringing essential medicines under price control to the cabinet so far, minister of state for fertilisers and chemicals Srikant Kumar Jena in a written reply in the Rajya Sabha today.

The draft National Pharmaceuticals Policy, 2006, which recommended bringing essential medicines under price control, was submitted to the Cabinet for its approval. The cabinet considered the policy at its meeting held on 11 January 2007. It was decided that the matter may, in the first instance, be considered by a GOM.

Under the provisions of the Drugs (Prices Control) Order, 1995 (DPCO 1995), prices of 74 bulk drugs included in its schedule and the formulations containing any of these drugs are controlled. The National Pharmaceuticals Pricing Agency (NPPA)/government fixes or revises prices of the scheduled drugs/formulations as per the provisions of the DPCO, 1995. No one can sell any scheduled drug/formulation at a price higher than the price fixed by NPPA/government, the minister said.

During the current financial year 2009-10 (up to 28 June 2009), the prices of 481 medicine packs have been fixed/revised by the NPPA, out of which only in 42 cases the prices have increased. These comprise 8.7 per cent of the total cases for which prices were fixed/revised during the year. In the remaining cases, the prices were either reduced or fixed for the first time or there was no change in the price.

In respect of drugs not covered under the DPCO, 1995, ie, non-scheduled drugs, the manufacturers are at liberty to fix the prices by themselves without seeking the approval of NPPA/government. Such prices are normally fixed depending on the various factors like the cost of bulk drugs used in the formulation, cost of R&D, cost of utilities/packing material, sales promotion costs, trade margins, quality assurance cost, landed cost of imports etc.

Wherever a price increase beyond 10 per cent per annum (20 per cent before 1 April 2007) is noticed, the manufacturer is asked to bring down the price voluntarily failing which, subject to prescribed conditions action is initiated under paragraph 10(b) of the DPCO, 1995 for fixing the price of the formulation in public interest, he said.