INDIA ANNOUNCES NEW DRUG PRICE CONTROL MOVES

According to India's chemicals ministry, the government will fix profit margins on unbranded drugs later this month. Some 74 high-volume drugs -- equivalent to roughly a quarter of the market -- already have fixed trade margins under the Drug Price Control Order (DPCO), although it appears that maximum margins will be more generous for drugs outside the DPCO regime.

Under the plans, wholesale margins on non-branded medicines will be fixed at 15% above the factory exit price, and at 35% for above this level for final retail prices. In comparison, retail margins on DPCO drugs are capped at 16% above the factory exit price. The extension of controls on non-brand drugs follows claims that final selling prices can be more than 1,500% higher than the manufacturer price.

Meanwhile, industry groups are more likely to welcome the government's decision to reject a recommendation to authorise generic name sales on all so-called "monopoly" drugs, defined by the Task Force on Drug Affordability as those with over 70% of market share in their therapeutic segment. While the decision will be welcomed by the industry, observers note that such a move would not affect OTC generics, thus impacting less than 2% of India's US$11bn drug market.

Nevertheless, trade associations remain concerned that the government will ultimately seek to have all "essential" medicines placed under price control. Such a move would be negative, at a time when multinational criticism of India's patent and regulatory regime appears to be growing.