Indian Health Ministers Would Impose Price Controls on All ‘Essential’ Generic Drugs

An Indian panel of government health ministers has recommended price controls be applied to all 348 generic drugs on the country’s essential generic drugs list. The recommendation is somewhat positive for industry, since the proposed controls would peg prices to an average sales price formula rather than a fixed government-determined price.

The health ministers have submitted their final proposal on what drugs should be covered and how prices will be set by the National Pharmaceutical Pricing Authority to the Indian cabinet, Chinu Srinivasan, joint convener of the All India Drug Action Network, whose petition on the issue triggered Supreme Court hearings, said.

A decision to include all 348 generic products on the essential drugs list would have a sizable impact on the industry, placing price controls on about 60 percent to 70 percent of the generic drug market, according to reports from those on the ground in India, said Amy Hariani, director and legal policy counsel at the U.S.-India Business Council. Currently, only 74 generics are subject to mandatory price controls.

What does that mean for generic-drug makers in India? What about U.S. manufacturers doing business in India?

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