A panel set up to look into the pricing mechanism for patented drugs has said that prices have to be decided after deliberations with manufacturers if the government is to adopt price negotiation model, Parliament was informed today.

A committee was set up to look into the issue of price negotiation mechanism of patented drugs.

It has “mentioned in its report that in case of reference pricing the prices of the product are fixed on the basis of the prices in other similarly placed countries and in case of price negotiation model the prices are fixed after negotiations with the manufacturer” Minister of State for Chemicals and Fertilisers, Srikant Kumar Jena said in a reply to the Rajya Sabha.

According to industry estimates, there are around 18 patented drugs being marketed in India with a total market value of around Rs 4,000 crore to Rs 5,000 crore, about 12 per cent of the overall domestic market.

At present, there is no system of price negotiation for patented drugs in the country. Under the provisions of the Drugs Price Control Order, 1995, the prices of only 74 bulk drugs and formulations containing any of these scheduled drugs are controlled.

The government can, however, dictate prices of patent drugs in rare circumstances by invoking compulsory licensing.

In March this year, India Patents Office had invoked compulsory licensing permitting Hyderabad—based Natco Pharma to manufacture and sell cancer—treatment drug Nexavar at a price, over 30 times lower than charged by its patent—holder Bayer Corporation.

Natco was allowed to sell the drug at a price not exceeding Rs 8,880 for a pack of 120 tablets required for a month’s treatment as compared to a whopping Rs 2.80 lakh charged by Bayer for its patented Nexavar drug.

As per the WTO agreement, a compulsory license can be invoked by a national government allowing someone else to produce a patented product or process without the consent of the patent owner. It is done for the cause of public health.

Related Topics