August 11, 2006

India's Ministry of Chemicals and other governmental departments, along with the prime minister, are currently debating a National Pharmaceutical Policy provision proposing price controls on the 354 drugs of the National List of Essential Medicines.

The prime minister feels that the proposal should be reviewed to ensure that the list of price-controlled drugs remains as short as possible and that bringing the entire list under price regulation is unnecessary. The Planning Commission has suggested that the government should seek legal opinion to decide whether India's Supreme Court really intended to bring all 354 drugs under price controls in its verdict three years ago, adding that an increase in price controls could discourage new investment and limit competition. The commission says the government is reversing its economic policy, which has so far led to the growth of India's pharmaceutical industry.

Though the disputed provision suggests a cost-plus method, other systems of price control like negotiated prices, differential prices, reference prices and bulk purchase price have been proposed.