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Draft policy moots price curbs on 35 drugs

India will slash the number of bulk drugs subject to price controls to 35 from 74 under a draft policy to be sent to the federal cabinet for approval, a senior government official said on Monday.

Bulk drugs are the active pharmaceutical ingredients used in preparing medicines.

The move would allow pharmaceuticals firms, long upset by the government's strict control of prices, to charge more for their products in a country where drug prices are among the lowest in the world.

Analysts have said that easing price controls would benefit all drug firms but multinationals would gain the most as controlled products account for a large part of their sales.

The number of bulk drugs under price controls would be cut to 35 from 74, the official, who did not wish to be identified, said.

"The health ministry has sought some clarifications and the draft of the policy will be sent to the cabinet committee on economic affairs for approval soon after tackling these," the official said. He did not give any date.

The official said only bulk drugs with annual sales of Rs 200 million and a market share of more than 50 per cent would be covered by price controls under the new policy.

Data supplied by market research agency ORG-MARG for the financial year to March 1999 would form the basis for determining the bulk drugs to remain under price controls, he said.

Exempt from controls

The draft policy also proposes that drug makers be exempt from price controls for 15 years if they develop a drug through indigenous research, the official said.

In addition, a drug produced in India through indigenous research and patented under the Indian Patent Act, 1970 would be exempt from price controls until the patent ends, he said.

The government has for the past decade been relaxing controls on the pharmaceuticals sector in line with its overall economic liberalisation programme.

But it plans to retain certain pricing powers in the draft policy. It would keep the power to set the maximum sale price of any bulk drug if it deemed it necessary in the public interest, the official said.

The government also plans to fix the prices of all medicines used for treating tuberculosis, malaria, AIDS, cancer and filaria, a parasite transmitted by mosquitoes.

The government would also take steps to check prices if there was any surge in the cost of drugs freed from controls.

The draft policy would allow companies that have met World Health Organisation and Good Manufacturing Practices requirements to charge an 8 per cent in additional costs.

As well, companies could charge an extra two percent for better packaging and those which had manufacturing units approved by the US Food and Drug Administration could charge an extra 3 per cent.

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