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Passage V
Apprehensive that pharma companies may stop or reduce production of essential drugs after they come under price control, the Government is mulling steps to ensure that companies maintain present levels of output of these critical drugs. Sources said the recent decision to put a price cap on 384 drugs was accompanied by a concern that the manufacturers could lose interest in the medicines owing to reduced margins of profit. It was based on the past experience when the drug price control was first enacted. The Group of Ministers (GoM) that took the landmark decision directed the Department of Pharmaceuticals to ensure that present production levels were maintained after the price control. As a follow-up, sources said; the Government could fix mandatory level of production in these drugs for each company in business. The fear over companies retaliating with decreased production revolves around the fact that price control would check profit margins. Once the essential medicines are brought under the Drug Price Control Order, they cannot be sold at a price higher than the fixed by the Government. A senior officer said, "We will ensure that accessibility and availability of essential drugs does not go down " The GoM has also decided that the prices of medicines, which are part of the price control order of 1995 but not in the National List of Essential Medicines 2011, would be frozen for a year and thereafter a maximum increase of 10% per annum would be permitted. Out of the 384 medicines, the prices of 37 drugs are controlled by the National Pharmaceutical Pricing Authority (NPPA). The Government, through the NPPA, controls prices of 74 bulk drugs and their formulations.
Apprehensive that pharma companies may stop or reduce production of essential drugs after they come under price control, the Government is mulling steps to ensure that companies maintain present levels of output of these critical drugs. Sources said the recent decision to put a price cap on 384 drugs was accompanied by a concern that the manufacturers could lose interest in the medicines owing to reduced margins of profit. It was based on the past experience when the drug price control was first enacted. The Group of Ministers (GoM) that took the landmark decision directed the Department of Pharmaceuticals to ensure that present production levels were maintained after the price control. As a follow-up, sources said; the Government could fix mandatory level of production in these drugs for each company in business. The fear over companies retaliating with decreased production revolves around the fact that price control would check profit margins. Once the essential medicines are brought under the Drug Price Control Order, they cannot be sold at a price higher than the fixed by the Government. A senior officer said, "We will ensure that accessibility and availability of essential drugs does not go down " The GoM has also decided that the prices of medicines, which are part of the price control order of 1995 but not in the National List of Essential Medicines 2011, would be frozen for a year and thereafter a maximum increase of 10% per annum would be permitted. Out of the 384 medicines, the prices of 37 drugs are controlled by the National Pharmaceutical Pricing Authority (NPPA). The Government, through the NPPA, controls prices of 74 bulk drugs and their formulations.
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