Essential drug prices to fall as GoM approves new pricing policy

With the group of ministers (GoM) on pharmaceutical pricing having resolved all outstanding issues, the price of 348 essential drugs in India are expected to come down by around 25 per cent.

Agriculture minister Sharad Pawar, who heads the GoM, said that its recommendations would now go to the cabinet for its final approval. The cabinet has to endorse it before November 27, the deadline set by the Supreme Court.

The GoM had in September formulated a policy on the pricing of 348 essential drugs based on weighted average of all the drugs in a particular segment having more than one per cent market share. However, the finance ministry had objected to this, pointing out that this method would result in an increase in the price of many low-cost drugs.

The GoM then adopted the simple average method, which is expected to ensure all-round reduction in the price of essential drugs.  

Currently, the National Pharmaceutical Pricing Authority controls the prices of 74 bulk drugs and their formulations.

But with price of essential drugs soaring in recent years, the government decided to impose a cap on the price of 348 essential drugs and bring them under the 'national list of essential medicines'. The drugs include anti-AIDS and anti-cancer drugs, painkillers, sedatives, some steroids and lipid-lowering agents, besides anti-TB medicines.