Updated on 21 November 2012
Associated Chambers of Commerce and Industry of India (ASSOCHAM) pushes for market-based drug pricing in India
Bangalore: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) apprehends that the Supreme Court ruling (held on October 03, 2012) will result in 70 percent of the Indian pharmaceutical market being put under the inconsistent and inefficient cost-based price control mechanism of Drug Price Control Order (DPCO) 1995. It also feels that all molecules associated with the order will be crippled by disastrous repressions.
However, the weighted average price (WAP) of all brands, having greater than one percent market share formula will result in over 20 percent price reduction in 60 percent of the NLEM medicines.
The chamber spokesman said that the order will severely impact the availability of essential medicines for patients as it will be nearly impossible for the industry to supply essential medicines.
In a memorandum submitted to the Finance Minister Mr P Chidambaram, ASSOCHAM said the weighted average price (WAP) mechanism to control the price of essential medicines will achieve twin objectives of public health and industrial growth.
The chamber further said that the existing cost-based policy reveals lack of relevance in current market conditions, significant limitations and adverse impact on the industry and patient access. It has shifted bulk drug production out of India to countries like China, escalated prices for select medicines, reduced the number of industry players, reduced innovation in cost control medicines and limited new introductions. Furthermore, it failed to help medicines reach patients located in rural areas.