The industry is paying a heavy price for the capping of essential medicine prices, according to Shobana Kamineni, the new President of the Confederation of Indian Industry (CII).
Kamineni, who is the Executive Vice-Chairperson of the healthcare behemoth Apollo Group, told BusinessLine that the pharmaceutical industry lost about 5 percentage points in growth due to capping of drug prices.
“The pharmaceutical industry grew about 10 per cent last fiscal. The industry could have grown much more. About 5 per cent was taken out by price capping, so the actual growth could have been 15 per cent,” she said.
She further added that concerns over the Goods and Services Tax impacting the industry were minor. Price caps are a bigger concern.
“I am a firm believer in universal right to healthcare, but if you want quality healthcare you don’t want to take out the access to the best medicines,” she said.
Recently, following the capping of cardiac stent prices, in which the National Pharmaceutical Pricing Authority (NPPA) had slashed prices of the life-saving devices by as much as 85 per cent, several multinational companies threatened to withdraw some of their most expensive stents from the Indian market.
The NPPA caps prices of about 376 drugs, under the schedule I of Drug Price Control Order. These medicines form the National List of Essential Medicines (NLEM).
NITI Aayog viewThe government’s policy think-tank NITI Aayog has also taken a pro-industry view on the issue of capping of drug prices.
In its Three-Year Action Agenda, unveiled last month, the Aayog had drawn a parallel between the prices of medicines and quality, suggesting that there was a trade-off in quality of medicines if prices were brought down.
“A balanced approach toward regulation is needed for achieving the twin objectives of access to effective medicines and a strong pharmaceutical industry. There is a trade-off between lower prices on the one hand and quality medicine and discovery of breakthrough drugs on the other.
“It is therefore recommended that the Drug Price Control Order may be delinked from the National List of Essential Medicines,” the Aayog’s agenda paper said.
The suggestion by the Aayog had received criticism not just from health activists but also from the Swadeshi Jagran Manch, an outfit affiliated to the Rashtriya Swayamsevak Sangh (RSS).