Proposed Drug Pricing Policy to hit revenues of pharma sector

NEW DELHI: The proposed Drug Pricing Policy will widen the extent of price control to about 30% of the local pharma market and also hit the revenues of the industry which is bearing the burnt of risen input costs, inflation and regulatory challenges, according to industry chamber Confederation of Indian Industries (CII).

 

Recently, the Group of Ministers gave nod to a recommendation to get 348 essential drugs (presently 74 drugs) under the price control at the weighted average price of drugs with minimum of 1% market share. It is scheduled to go to Union cabinet for the final view.

 

Arun Sawhney, chairman, National Committee on Pharmaceuticals, CII, said, “CII welcomes the move by the Government to make essential drugs more affordable and accessible to the society. The new policy recommends a shift from cost based to market based pricing which is a fair approach and it will help improve the availability of essential medicines. While the industry welcomes this move, it would also be pertinent to note that the proposed policy will expand the span of price control to around 30% of the domestic pharmaceutical market and impact revenues of the industry which is already facing increased input costs, inflation and a variety of regulatory challenges. CII is hopeful that the Government would extend some exemptions proposed in the draft National Pharmaceutical Pricing Policy 2011 by the Department of Pharmaceuticals.”

 

Reports suggest that the proposed draft pharma policy may hit those multinational companies (MNCs) the most, which are present in the premium pricing band.