Pharma analysts in India and abroad believe that cost-based pricing in National Pharmaceutical Pricing Policy is not suitable to safeguard the interests of patients as well as the pharma industry.

The draft National Pharmaceutical Pricing policy, unveiled by the Department of Pharmaceuticals in October last year, proposes to cap prices of 348 essential medicines and their formulations at an average price of three best-selling brands.

The Group of Ministers (GoM) on National Pharmaceutical Policy are expected to meet shortly to make final recommendations to the Cabinet.

Analysts said the regulatory authorities have wrongly been focusing on price controls in the belief that this will boost access to healthcare.

However, the experience of other nations, and India’s past experience, indicates the desired outcome will not be achieved via price caps as multiple hurdles hinder healthcare access in India and these need to be addressed as well.

The efficacy of modern medicines has pushed average life expectancy in India from little more than 40 years in the 1960s to the world average of about 67 years.

“This success has sparked an increase in non-communicable diseases, which present-day treatments cannot cure. The situation makes it imperative to support the search for innovative drugs that cure such ailments,” said Mr David Taylor, Professor of Pharma and Public Health Policy at UCL School of Pharmacy, University of London.

“Price caps have the opposite effect though by disincentivising the sale of innovative drugs or drug research in India. Patients with incurable endemic diseases will continue to suffer in silence since cures for such diseases may no longer be actively researched,” he said.

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