INDIAN OFFICIALS SHELVE DRUG MARGINS FIXING PLAN

According to local reports, senior Indian government figures have effectively overruled plans outlined by the country's chemicals ministry to restrict margins on pharmaceutical products not subject to official price controls. The proposed order related to so-called non-scheduled formulations, or products outside the scope of a 1995 law intended to guarantee affordable access to a number of drugs. Reports suggest the proposed amendment could have obliged some producers and distributors of such drugs to sell to wholesalers at 10% below retail prices for branded drugs, and at a 15% discount in the case of generic products. Meanwhile, selling prices to retailers would have been reduced by as much as 20% for branded drugs, and 35% in generics.

It is reported that India's law ministry and the Prime Minister's office were active in defeating the proposals, and pharmaceutical industry bodies and companies also opposed the plans. The issue of drug pricing has recently been highly controversial in India, with humanitarian groups raising fears that the country's new patent legislation could lead to higher prices on many drugs in both India and overseas. However, the country's government has recently insisted that the World Trade Organisation-compliant new framework will not lead to higher prices, and has announced that it will study alternative options to price control in order to ensure the supply of affordable pharmaceutical products.