INDIA CUTS PRICES ON KEY DRUGS, REJECTS INDUSTRY CLAIMS
India's National Pharmaceutical Pricing Authority (NPPA) has announced price cuts of up to 36% on the prices of 16 drugs on the national essential medicines list. The NPPA has also announced that the maximum retail prices of a further 308 drugs including antibiotics, multivitamins, asthma and malaria drugs will shortly be capped or even reduced.
Meanwhile, the Indian prime minister's Task Force on Drug Affordability has delivered its long-awaited final report. Its conclusions are mixed news for drugmakers, with the panel recommending the continuation of price controls on 314 medicines. Sector sources had lobbied for the inclusion of only 272 products, claiming that the remainder overlapped with other price-controlled medicines.
Firms will take little comfort from the fact that 40 of the 354 drugs initially expected to remain controlled will be freely priced, as these are already supplied under low-cost tenders to government hospitals. Significantly, however, the Task Force agreed with the industry that the drugs on the essential medicines list should be supplied at a 50% discount on their official maximum retail price (MRP).
Justifying its decision to retain the price controls to such an extent, the panel claimed that in the past some producers have manipulated the system by changing product names, formulations or dosages. The industry estimates the annual cost of continuing pricing controls on the extra products at INR35bn (US$795.03mn).
The report also makes other key recommendations, including the de-branding of generic medicines on the list. Although this move will not apply to OTC generics, it could affect any generic with a market share of over 70%; industry sources warn that such a move could encourage copies. One leading company also notes that a proposal to bring all patented medicines under price negotiation ahead of marketing approval would violate TRIPS.
More positively, the panel also proposed halving excise duty on drugs to 8%
and merging India's three drug regulatory agencies. In the meantime, it remains
to be seen whether any of the report's proposals will be implemented, given
the strength of opposition to the plans among vested interests.