Costly drugs to get affordable

The Centre on Thursday approved the long-awaited National Pharmaceutical Pricing Policy (NPPA), which intends to keep the prices of 348 essential drugs under control and thus reduce prices.

“The National Pharmaceutical Pricing Policy has been approved by the Cabinet with an objective to put in place a regulatory framework for pricing of drugs to ensure their availability at reasonable prices,” a source said.

Currently, the government, through the NPPA, controls prices of 74 bulk drugs and their formulations.

Last month, the Supreme Court had set a deadline of November 27 for the government to finalise the policy while asking it not to alter the existing mechanism of cost-based drug pricing.

A source said the pricing now would be based on simple average of rates of all brands which have more than one per cent market share. “Any increase in prices beyond 10 per cent for 348 drugs will have to be cleared by NPPA.” Experts claim that the decision to opt for simple

average method to determine the base price would lead to a 30 per cent drop in the drug prices.
According to Mr Ranjit Kapadia, senior VP, institutional research, Centrum Broking, drug prices are expected to drop by almost 30 to 35 per cent. “The multinational pharma firms would be impacted the most as they are the market leaders whereas the impact on the domestic pharma companies would be relatively less,” he added.

Sources, however, claim that the government has also considered providing sufficient opportunity for innovation and competition to support the growth of the pharma industry.

Earlier in the day, shares of pharma companies fell on speculation that the pricing policy might be more disruptive than expected.

“The new pricing policy would have an impact across the board. Those products, which are in the higher end of the price band would be impacted the most,” noted Mr Hitesh Sharma, partner and national leader, life science, Ernst & Young, adding that exact impact on the industry could be analysed only after going through the finer details of the approved policy.

Earlier, a group of ministers headed by agriculture minister Sharad Pawar proposed to fix prices based on weighted average of brands which have more than one per cent market share.

The policy is likely to be more negative for firms such as GSK, Dr Reddy’s Labs, Glenmark and Cadila, Nomura said, as their drugs are priced higher than some others.

Relief for buyers, pain for firms The government will control 348 drugs compared to current 74 bulk drugs.
Companies need to take the govern ment's nod for more than 10% price hike.

Base price is fixed on simple average could be 30% lower.

Multinational drug companies could be the most affected.

Post new comment

<form action="/comment/reply/204674" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: &lt;a&gt; &lt;em&gt; &lt;strong&gt; &lt;cite&gt; &lt;code&gt; &lt;ul&gt; &lt;ol&gt; &lt;li&gt; &lt;dl&gt; &lt;dt&gt; &lt;dd&gt;</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-6ccc17e61e0e6e354c764a3a2a4fec4a" value="form-6ccc17e61e0e6e354c764a3a2a4fec4a" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="80037638" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>

No Articles Found

No Articles Found

No Articles Found

I want to begin with a little story that was told to me by a leading executive at Aptech. He was exercising in a gym with a lot of younger people.

Shekhar Kapur’s Bandit Queen didn’t make the cut. Neither did Shaji Karun’s Piravi, which bagged 31 international awards.