Paswan wants more bulk drugs under price control

While the pharmaceuticals industry is lobbying to get the existing list of the 76 bulk drugs outside the Drug Price Control Order (DPCO), Chemicals and Fertilisers Minister Ram Vilas Paswan is keen on extending the list to cover 354 bulk drugs, which in effect will cover most of the industry.

According to industry sources, if accepted, the move will cover over 6,400 pharmaceutical formulations.

Paswan is meeting representatives of the Organisation of Pharmaceutical Producers of India (OPPI)in the forenoon of the 29th of this month to get their view and members of the Indian Pharmaceutical Aliance (IPA) in the afternoon on the same day. He will meet the Indian Drug Manufacturers Association in the morning of the 30th to get its view.

The OPPI's members include Abbott India, AstraZeneca, Bayers, Boots Piramal, Bristol-Myers Squibb, Eli Lilly, Dr Reddy's Lab, GlaxoSmithKline and Lupin Limited.

The IPA includes Alembic, Cadila, Dr Reddy's, Lupin, Ranbaxy, Sun Pharma and Torrent. The IDMA represents around 9,000 small and medium companies.

Under the proposal, a weighted average price of the top three manufacturers will be taken as the DPCO price in place of the current one based on outdated cost norms.

While it will effectively increase the ceiling prices for the current drugs covered by the DPCO, it will put a cap on prices for other drugs. An additional problem is that it will open the decontrolled part of the industry to license raj, and there will then be disputes about which price to consider, and each hike will have to be approved of by the ministry.

The other proposal that will be discussed is that of discounts for bulk purchases by the central government. Paswan has proposed the ceiling price for all sales be fixed at half the MRP value at any point in time.

While there is some dissent in the pharma industry, several firms feel this may not be too bad as dealer margins are typically around 30 per cent anyway, and bulk buyers are usually given additional discounts anyway.

So while the government will continue to float tenders for its requirements, the maximum quote will not be allowed to exceed half the MRP according to the proposal.

Several top industry leaders plan to be in Delhi on the appointed dates though it is not clear how many representatives of each industry body will be allowed to sit in on the meeting with the minister.

An interesting sign of greater cooperation within the industry, however, is that the IPA which was opposed to allowing 'data exclusivity' (or not making public all the data given by a firm to the Patent Office) which OPPI was advocating has now come around to the view that this could be allowed with certain caveats.