E-drug: BMJ: India to extend price controls on drugs
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[Copied as fair use. KM]
BMJ 2004;329:368 (14 August)
News extra
India to extend price controls on drugs
New Delhi Sanjay Kumar
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.
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