Ummid Assistant

Applications open for Manmohan scholarship at Cambridge

IIM-Trichy to offer short courses too at Chennai centre

Welcome Guest! You are here: Home Views & Analysis

Drug pricing: Which way will India go?

Sunday November 25, 2012 01:50:53 PM, Rohit Bansal, IANS

Related Article

Decision on new drug pricing policy by mid-November

The central government Thursday told the Supreme Court that it would decide on the new National Pharmaceutical Pricing Policy by    

US pushing India to hike cancer drug price

New policy should not make medicines costly: SC

Foreign investors, and not just the ones invested in pharmaceuticals, are in a tizzy. Come Nov 27, the Supreme Court is expected to decide which way India will go on pricing of drugs.

The federal cabinet, in a meeting presided over by Prime Minister Manmohan Singh, had Thursday okayed a National Pharmaceuticals Policy, expected to trigger a 20 percent drop in prices of essential drugs including anti-diabetics, painkillers, anti-infectives and anti-cancer medicines.

This Wednesday, the apex court hears a public interest litigation filed in 2003 to bring down prices of essential medicines.

While officials are tightlipped in deference to the court, there is widespread expectation that a fresh pricing mechanism has been drawn up by the Group of Ministers led by Agriculture Minister Sharad Pawar.

It is claimed that the mechanism caps prices of 348 essential drugs, following Finance Minister P. Chidambaram's strong opposition to a draft policy cleared in September.

The new pricing mechanism is expected to rely on "the simple average method" for determining the ceiling price of all the molecules (drugs) under a particular therapeutic area with over one percent market share, while the draft policy had capped the price by taking the "weighted average".

International investors don't mind the access argument. Some like Gilead do lean manufacturing of anti-HIV drugs by way of non-exclusive licenses in India. But they expect the apex court to understand India's need for a continued pipeline of innovation.

The United States-India Business Council (USIBC), a premier advocacy organisation comprising top American and Indian companies, in a letter to Chidambaram, has appreciated the decision of the ministerial group Sep 27.

Among them the organisation has listed and appreciated the move to restrict the span of price control to the National List of Essential Medicines, the commerce ministry's formula of pricing based on weighted average price of all brands that have higher than one percent market share by volume, and the analysis and incorporation of salient characteristics of price control mechanisms for essential medicines in other emerging countries.

Their stated concern remains the Supreme Court ruling of Oct 3.

This, some fear, could result in 70 percent of India's pharmaceuticals market being put under the inconsistent and inefficient cost-based price control mechanism as per Drugs Price Control Order of 1995.

This ruling will severely impact the availability of essential medicines for patients as it will be nearly impossible for industry to supply essential medicines, USIBC has noted. A patient-sensitised market based price control method and the perils of cost-based price control method: that is the main message.

The weighted average price of all brands, having greater than one percent market share formula, isn't just expected to create a 20 percent price reduction in 60 percent of the medicines under the government's National List of Essential Medicines.

It may also result in over 60 percent more patient savings than the average price of the top three brands formula, initially proposed in the draft policy.

This methodology, in conjunction with the existing policy of restricting individual brands from increasing prices beyond 10 percent per annum, is expected to prevent brands below the ceiling price from raising the prices by more than 10 percent.

The aim is to ensure the continuous availability of price-controlled medicines, by preventing them from going off the market on account of an unviable manufacturing environment. This had happened in the case of cost-based pricing.

Patients should benefit from access to innovation and by the introduction of new medicines, as players will continue investing in research and development that ultimately helps in innovative and more effective medicines.

The cost-based pricing does not factor in research and innovation efforts, nor the costs undertaken by pharmaceuticals players.

Top intellectual property rights counsel Prathiba Singh argues against stereotyping of Indian courts.

She tells foreign investors to understand that Indian judges aren't against innovation at all. But they aren't impressed by those propagating imports substitution as the innovation argument.

Rohit Bansal is chief executive and co-founder of India Strategy Group, Hammurabi & Solomon Consulting. He can be reached at




Home | Top of the Page


Note: By posting your comments here you agree to the terms and conditions of

Comments powered by DISQUS



More Headlines

16-yr old becomes first Hijab wearing girl to speak in British parliament

Russia to conduct surveillance flight over US

Latest opinion poll predicts sweeping victory for Narendra Modi

BJP cautions Jethmalani, Shatrughan joins oust Gadkari chorus

Kejriwal vows to change politics with Aam Aadmi Party

India vs England Second test: Cook, Pietersen defy Indian spinners

26 injured in Moharram clashes in UP

11 killed in Himachal road accident

16 killed in bus accident in Jammu region

Rare identical triplets born to Malegaon couple


Top Stories

Cash transfer of subsidy from Jan 1: Chidambaram

The government will start direct cash transfer of subsidy amount to beneficiaries in 51 districts from the beginning of the next year and targets to introduce the new  

Potential game changer: Direct cash transfers set to begin

Aadhar-based direct cash transfer system launched


  Most Read

Palghar arrests: Maha Home Minister for strict action against guilty cops

Maharashtra Home Minister R.R. Patil Saturday said the state government has taken "very seriously" the arrest of two women for questioning on  

Rare identical triplets born to Malegaon couple

In what doctors claimed as a rarest of rare case, a 30-year-old woman in Malegaon has delivered identical triplets all boys, last Friday on November 16. Born at Sushmit nursing home in the city by normal vaginal delivery again 


  News Pick

A 'Pakistan' where Kasab's hanging was celebrated

"People in Pakistan not only distributed sweets and burst crackers but also plan to organise a feast soon to celebrate the hanging of the terrorist," said  

Kejriwal vows to change politics with Aam Aadmi Party

Promising to change the way political parties function in the country, Arvind Kejriwal and his anti-corruption group Saturday said the name of their new outfit will be Aam Aadmi  

BJP cautions Jethmalani, Shatrughan joins oust Gadkari chorus

The BJP's internal troubles resurfaced Saturday with the party taking a serious note of Ram Jethmalani questioning the stance over appointment of new CBI chief and Shatrughan Sinha  

Is SP playing 'dangerous' politics with Muslims?

Uttar Pradesh Chief Minister Akhilesh Yadav and his father, Samajwadi Party (SP) chief Mulayam Singh Yadav, have time and again expressed their indebtedness to Muslims for voting them to power in the assembly elections earlier this year. "Many innocent Muslim youths have been framed 


Picture of the Day

President Pranab Mukherjee at the National Education Day 2012 function to commemorate the birth anniversary of Maulana Abul Kalam Azad, in New Delhi on November 11, 2012.

(Photo: Sanjiv Misra)


Recommend the story to your friends



RSS  |  Contact us


| Quick links



Subscribe to

Ummid Assistant



Science & Technology



About us




Government Schemes










Contact us


The Funny Side

Education & Career

    Disclaimer | Terms of Use | Advertise with us | Link Exchange is part of the Awaz Multimedia & Publications providing World News, News Analysis and Feature Articles on Education, Health. Politics, Technology, Sports, Entertainment, Industry etc. The articles or the views displayed on this website are for public information and in no way describe the editorial views. The users are entitled to use this site subject to the terms and conditions mentioned.

2012 Awaz Multimedia & Publications. All rights reserved.