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New drug policy expected by mid-July

The government is likely to unveil its long-awaited new pharmaceutical policy by the middle of July, a senior industry source said on Monday.

"The policy is in its final stages of formulation," he said, adding it would be examined by a central cabinet panel soon and was likely to be released ahead of the opening of the next session of Parliament, expected by July 23, he said.

Pharmaceutical prices in India are among the lowest in the world due to a tight price regime set by the government. The new policy is expected to relax the controls in line with liberalisation in other sectors.

Typically multinational drug firms would benefit the most from a price decontrol because a greater percentage of their turnover comes from products that fall under the tight regime.

The source said that under the draft policy, a drug would fall under the government's price control mechanism if it had annual sales of Rs 200 million ($4.26 million) and a market share of over 50 per cent.

"There is discussion now on finer details like whether companies carrying out original research or operating factories with US Food and Drug Administration approval should be allowed higher prices for their drugs," he said.

Based on the new criterion, sources estimate the number of drugs on the price-controlled list will come down to 31 or 32 from the current level of 74, including 18 drugs that are currently not controlled.

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