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Drugs to skip price control for 5 years

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Drugs that boast of an element of Indian innovation can skip price control for five years under the proposed new pharmaceutical pricing policy, an incentive for encouraging domestic research.

The government is in the process of expanding the span of drug price regulation to 348 drugs listed in National List of Essential Medicines to improve access to cheaper medicine. At present, prices of 74 bulk drugs and their formulations are regulated.

“This would spur innovation and make sure price-control regime doesn’t dissuade pharma firms from research and development,” said a government official.

The department of pharmaceuticals has sent the new pricing order to law ministry for clearance. Three types of pharma innovations can claim immunity from set prices for five year period, which kick off from different milestones depending on the type of R&D.

If a new drug has been developed using indigenous research and development and has been granted a patent under the Indian law, it can seek exemption from price control from the date, when it starts commercial production in the country. This product should not be produced anywhere else in the world.

Second, if a pharma company discovers a new process to make an existing drug and gets a patent for it under the Indian law, it can apply for a five-year relaxation from price regulation. This privilege would kick-in for the drugmaker from the time it starts manufacturing the drug to sell in the domestic market.

Finally, a finished drug which uses a new delivery system (such as controlled release or sustained release) developed through domestic research and development would also be eligible for exemption from price control.

But in this case, the five-year count would begin from the date it gets a market approval from the drug regulator of the country and not from the time it starts producing the drug. Also, in this case, pharma companies would have to furnish evidence of market approval from the Drug Controller General of India (DCGI).

“Government may having regard to factors (of the types of innovation mentioned)…by an order in the official gazette exempt any manufacturer from the operation of all or any of the provision of this order (Drug Price Control Order, 2013),” said a draft of the drug price order.

“It would not only encourage Indian pharma players to actively invest in Research & Development; but help the market grow and also immensely benefit the common man who would have better access to newer and more innovative product,” said Shakti Chakraborty, Group President, India & CIS, Lupin. Even though Indian drugmakers are yet to prove their mettle in the area of new drug discovery and product patents, they are known for their prowess in process patents globally and are therefore likely to benefit from the clause.

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