The contentious issue of how prices of expensive patented drugs in the country should be controlled would now be decided by an inter-ministerial panel.
In addition to the department of pharmaceuticals, other likely members in this panel include ministry of health and family welfare, department of industrial policy and promotion, department of commerce. This group would either be headed by the Pharma department or the Planning commission.
Presently, there is no mechanism to regulate prices of patented drugs. This exercise comes shortly after the government put in place a new market based method to control prices of 348 essential drugs last month.
Since then, the drug price regulator has already notified prices of 151 drugs under one lot last week and 40 drugs under the second lot on Tuesday. It would continue to fix prices of the rest of 652 formulations under the price net in coming weeks.
“A decision to consult other ministries such as health, DIPP and commerce on the patented drug pricing issue has been taken. We are in the process of constituting the group. The modalities for this would be finalised soon,” a pharma department official confirmed.
An internal committee from department of pharma suggested in March that the prices of patented drug here be linked to rates at governments of UK, Canada, France, Australia and New Zealand procure these patented medicines from innovator drug firms. The price should then be adjusted by taking into account, India’s purchasing power parity, the committee recommended.
It however added two caveats. First, the proposed mechanism would apply only to medicines bought through public procurement and health insurance companies. This irked public health activists and drug regulatory experts.
They complained that the formula would leave out over three fourth of the country’s population to depend on market prices, considering less than 23% of India’s population is covered under the public health system provided by the Central Government Health Scheme, Railways and defence services, and private insurance.
Secondly, the committee decided against linking the marketing approval of a patented drug with prices fixed for procurement citing fears that such a move may threaten availability of such drugs in the country.
This peeved the domestic drug makers who manufacture generic medicines and drug experts who protested that the committee has deviated from its mandate it started with six years ago.
“The committee would propose a system of reference pricing/price negotiations/differential prices which may be applied for price negotiations of patented drugs and medical devices before their marketing approval in India,” said a government note of 2007, when the committee on patented drug pricing was constituted.