Price Control on Drugs Required, Indian Government Says

by Gopalan on  May 28, 2008 at 1:28 PM Drug News   - G J E 4
 Price Control on Drugs Required, Indian Government Says
Indian drug industry is protesting lowering of some bulk drugs by the government, but the government is firm that such monitoring and controlling of drug prices is necessary.

Union Chemicals Minister Ram Vilas Paswan asserted on Tuesday that the industry had not been unduly affected by the lowering of the prices of some formulations.


"Companies earn enough profits and have high margins, so they are not adversely affected by price control as they claim", Paswan said.

But then the Indian drug industry is believed to have threatened to stop manufacturing the drugs if the government failed to revise them upwards again - they were reduced in March.

The industry has complained that it is reeling under an increase in raw material prices, soaring crude oil prices and depreciation of rupee (against the dollar).

The National Pharmaceutical Pricing Authority (NPPA) had notified a revision in prices of 33 bulk drugs on March 21 after reductions in excise duty and countervailing duty were announced in the federal budget.

"Since these bulk drugs are being imported, their prices were revised downwards in tune with the change in countervailing duty", a senior official said.

The prices of 33 bulk drugs were revised downwards in the wake of change in CVD, and not because of the foreign exchange fluctuation, he told Times of India.

A 10% decrease in prices of bulk drugs (raw material) would translate into an actual price decrease of only 0.2 % in the formulation (finished product). Also, huge savings of 50-70% made in bulk purchase (of raw material) should also be reflected when prices are calculated, he pointed out.

Prices of bulk drugs whose prices have decreased in the range of 0-5% are 28 medicines, while there are only 5 drugs whose prices have gone up from 5 to 10% and above, according to the official.

Interestingly, none of the companies manufacturing these drugs have directly sought a price revision from the government, but it is the industry body that is making the representation, it is said.

Source: Medindia

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