In what may help allay apprehensions of the pharmaceutical industry, the government has asserted before the Supreme Court that its new drug pricing policy is aimed at controlling prices of essential drugs and not at putting a leash on the entire pharma business by controlling prices of all medicines in the domestic market.
Defending its new Drug Price Control Order (DPCO) to fix the ceiling price of essential medicines on the basis of market-based pricing, the government has pointed out that the new regulatory framework sought to strike a balance between availability and affordability of medicines. It maintained drug pricing was a policy decision, which has been made by the experts, and so merits no interference by the court.
The government has been asked by the SC to justify its 2013 DPCO, by virtue of which 348 medicines have been notified under the National List of Essential Medicines (NLEM-2011) for being brought under price control regime.
A PIL by NGO All India Drug Action Network alleged market-based pricing policy led to average ceiling prices in many cases higher than the market leader price. The NGO sought direction to Centre to continue with cost-based ceiling prices of all essential drugs, besides bringing all essential medicines and their combinations under price control.
In a separate affidavit, Ministry of Health has informed that the government has decided to revisit the NLEM-2011 and an expert committee will be constituted soon to suggest appropriate changes in the list of essential drugs.
While defending the current policy, the Department of Pharmaceutical has replied that shift from cost-based pricing (in 1995 DPCO) to market-based pricing was to ensure availability of essential medicines at reasonable prices while providing sufficient opportunity for innovation and competition to support industry’s growth.