Your medicines can get cheaper if the Government accepts the recommendations of the Ministerial Panel. While industry estimates the average price reduction at about 11 per cent, the reduction on some medicines from many large companies, domestic and foreign, could be as high as up to 75 per cent.
The Group of Ministers (GoM) on new drug pricing policy on Thursday recommended fixing the maximum retail price (MRP) of 348 essential medicines at the average price of all brands in a segment that has more than one per cent market share by sales.
While this will reduce the prices of several costly brands and will benefit the patients, it may also allow low-cost medicine manufacturers to increase their price.
Chairman of the GoM, Agriculture Minister Sharad Pawar, told reporters that the recommendations will be sent to the Cabinet next week.
Sources from the Ministry told Business Line that the GoM has also recommended not to extend exemptions to medicines priced under or at Rs 3 a tablet. The draft National Pharmaceuticals Pricing Policy of November 2011 had listed certain exemptions for all drugs costing less than Rs 3 a unit.
The draft policy had proposed that price control be exercised on all 348 drugs with 614 dosages of each of the medicines as specified in the National List of Essential Medicines (NLEM) and other combinations of medicines mentioned in the list.
“It (recommendation) will be a statutory for doctors to recommend generic medicines now. We have decided to price the drugs to the lowest (with one per cent market share),” Fertilisers and Chemicals Minister Srikant Jena said.
Opening up of more generic drugs stores through out the country was also been recommended by the GoM, he said.
Industry unhappy
However, some industry experts and associations said the decision on the new pricing policy would have a bad impact on the pharma industry.
“The new proposal will have adverse impact on the industry, as the span of price control will now cover around 30 per cent of the Indian pharmaceutical market with further squeeze in the margin,” Tapan J. Ray, Director-General, Organisation of Pharmaceutical Producers of India, said.
“It hurts,” said Indian Pharmaceutical Alliance’s General Secretary D.G. Shah as the industry loses one year of its growth. The top 100 drug companies, both domestic and multinational, will be affected and there will be a 15-17 per cent revenue loss to the industry, at about Rs 1,500 crore, he said.
This will also impact about 62 per cent of the NLEM market by value. In other words, prices will be reduced for almost two-thirds of the sales value of NLEM medicines, according to some in the industry.
A study shows that prices of 60 per cent of NLEM medicines will be reduced by more than 20 per cent.