The Government today sought to allay the pharmaceutical industry's fears that its growth would be compromised by the new drug pricing policy. Mr Srikant Kumar Jena, Union Minister of Chemicals and Fertilisers, said that the prices of only the “most essential drugs' would be under the scanner.
Voicing his concern over the rising cost of medicines and healthcare, the Minister said, “unlike the FMCG, medicines are not available in a free market as the prescription of a doctor drives the market and there is an asymmetry due to the interests of various stakeholders. This is an issue that is engaging the attention of governments of even developed countries, where a well-developed insurance sector and more informed public is also finding it difficult to contain costs of medicines and overall healthcare.” He was speaking at the India Pharma Summit 2011, organised jointly by FICCI, Department of Pharmaceuticals and the WHO Country Office
The industry's concern was expressed by Mr Pankaj Patel, CMD, Zydus Cadila Healthcare Ltd, who said that the price monitoring mechanism would bring 75 per cent of the turnover of the industry under its fold and would constrain its growth.
Mr Jena then voiced his concern over the likelihood of increase in prices of common drugs following the acquisition of Indian pharma companies by foreign firms in the wake of the liberalisation of FDI to the extent of 100 per cent.
“The acquiring companies need to clearly demonstrate the value addition brought forth, either for servicing the domestic segment or significant increases in export earnings. The motive should not merely be shopping of Indian companies to access one of the highest growth markets in India or to acquire facilities and reduce competition of potential Indian pharma industry in its quest for access to emerging export markets,” Mr Jena said.
He said, “The apprehension amongst policy makers is that if five or 10 foreign companies take over production bases in India through the 100 per cent FDI route, it would give rise to monopolies, which would be able to dictate prices of common drugs, which the poor in this country would not be able to afford.” tkt@thehindu.co.in