INDIAN COMMERCE MINISTRY WARNS AGAINST DRUG PRICE CONTROL

India's Union Commerce Ministry has warned against any increase in price controls on drugs as they can indirectly affect the export performance of the domestic pharmaceutical industry. It also informed the Chemicals Ministry, which is preparing the National Pharmaceutical Policy 2006, to see that the reduction in prices does not lead to discontinuation of drug production.

Commenting on the draft policy, the ministry said that the reduction in drug prices will compel domestic pharmaceutical companies to quote low in export markets. The ministry explained that drug companies tend to discontinue the production of drugs under price control. Instead, drugs are imported. Lowering prices would also have a negative impact on R&D spending.

According to the ministry, prices of essential medicines have not gone up significantly over the last 10 years and are among the lowest in the world. Any attempts to squeeze the prices further may backfire. Instead, abnormal price increases should be handled on case-by-case basis.