India's minister for chemicals and fertilisers, Ram Vilas Paswan, has declared that the government will bring the prices of some 300 essential drugs under its control.
The move is seen as reversing the current trend of liberalisation. It aims to increase the affordability of drugs, as pharmaceutical companies were overcharging consumers. Currently, just 74 bulk drugs and their formulations are under price control.
Consumers are paying six to 32 times more than the retailers' purchase price for some drugs, says the chemicals ministry, referring to three drugs—nimesulide (an anti-inflammatory drug), omeprazole (a treatment for gastric ulcers), and cetrizine (an antihistamine)—and citing a study by the National Pharmaceutical Pricing Authority.
“This is an alarming development,” said Dilip Shah, secretary general of the Indian Pharmaceutical Alliance, an organisation based in Mumbai representing national, research based drug companies.
“Such a move would impact on the availability of drugs, burden the companies that have brought to the consumer the latest products at the lowest prices in the world, leave high priced, patented products outside the purview of price control, and jeopardise the global potential of the Indian pharmaceutical industry,” he warned.
In 1979, when 347 drugs were brought under price control, drugs became unavailable, and a black market—as well as spurious and counterfeit drugs—flourished, leading to hardship for consumers, Mr Shah said.
Prices of commonly used drugs such as antibiotics, antidiabetes drugs, and antituberculosis drugs declined from March 2002 to March 2003 by 9%, 4%, and 8% respectively, the alliance said.
But Mr Paswan argues that essential drugs should not cost more than twice the cost of production and that the maximum retail price and local taxes should be included in its final printed price. Since local sales tax and octroi — a tax on goods brought into a town — differ from state to state, the chemicals and fertilisers ministry has suggested that a uniform sales tax should be imposed across the country.
“We think all essential drugs should be under price control, and if this is seriously implemented along with some regulation on production it would be a welcome move—otherwise it will remain an empty rhetoric,” said Dr Amit Sengupta, co-convener of the People's Health Movement.
Such moves in the past have led drug companies to move production away from essential drugs under price control to drugs not covered by price control, said Dr Sengupta. “They were able to successfully sabotage such progressive moves,” he added.
Dr Sengupta dismissed as a myth the prevalent view that Indian drug prices are the cheapest in the world. “Only those drugs which are under patent outside India are cheaper here, while all other drugs here are more expensive than in Bangladesh, Sri Lanka, or even the United Kingdom and Canada,” he said.
A committee has been constituted—under the chairmanship of the joint secretary of the Department of Chemicals and Fertilisers and with representatives from the health and law ministries—to compile a list of drugs that would be brought under price control.