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LATEST NEWS UPDATES | Drug price policy under SC glare

Drug price policy under SC glare

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published Published on Aug 7, 2013   modified Modified on Aug 7, 2013
-The Telegraph


New Delhi: The Supreme Court today ticked off the government for "dilly dallying" on an affordable drug pricing policy, following a petition that said the delay was aimed at pushing through suggestions of the powerful manufacturers' lobby.

A bench of Justices G.S. Singhvi and Gopala Gowda asked the Centre to respond within six weeks.

The All India Drug Action Network (AIDAN) had filed the application saying the government was delaying a pricing policy that would make drugs affordable to the common man. Counsel Colin Gonzalves, who appeared for the NGO, said the intention was to push through a version suggested by the manufacturers' lobby that wanted to make profits of over 1,300 per cent.

Any move to introduce such a policy would have a disastrous effect as prices of essential and common drugs would shoot beyond the reach of ordinary citizens, AIDAN co-ordinator Mira Shiva said.

"We have to see how far the drug manufacturers have influenced the policy. Dealers and manufacturers seem to be having 10 per cent to 1,300 per cent of profit," the bench, which went through the application, observed.

"The government has been dilly dallying. So how many years has it taken for the government to come out with the policy?" the bench asked additional solicitor-general Siddharth Luthra, who appeared for the Centre.

The court said although various panels, including parliamentary committees, had held discussions on a pricing policy, nothing concrete had emerged till date.

The NGO has sought a directive from the court to bring under control prices of all drugs in the National List of Essential Medicines, including their combinations to root out irrational formulations. It also requested the court to ensure that only safe drugs and their formulations are manufactured and marketed for promotion of generic medicines.

The petitioner said the government had, by a gazette notification (No. 275, dated 7.12.12), notified the National Pharmaceutical Pricing Policy-2012. Later, on May 15, 2013, the government notified the Drugs (Prices Control) Order, 2013 (DPCO 2013), exercising powers conferred by the Essential Commodities Act, 1955. The notification followed a 2012 court directive that said the government should bring under control prices of all essential drugs.

The NGO alleged that the government had made a show of bringing in price control by introducing what is being called market-based pricing, instead of cost-based pricing - the method of calculating ceiling prices since 1979 that includes the cost of raw material plus costs of conversion and a margin.

The NGO alleged that the 2013 DPCO (price control order) was a poorly designed policy as it increased prices of essential and non-essential drugs by sanctioning an automatic yearly rise of at least 10 per cent, or according to the wholesale price index.

It said the May 15 formula notified as DPCO 2013 was "tantamount to legitimising the current unaffordable prices of medicines" - in effect, a "farcical" price control that was "arbitrary, irrational, anti-poor" and violated Article 21 (right to life) of the Constitution.

The NGO said the proposed policy had no relation to production costs as prices of brands reflected brand value, which result in drug makers making profits to the tune of 200-4,000 per cent and using them for questionable marketing practices in the name of brand promotion.

"These ... practices include pharma companies sending members of the medical profession on paid holidays. And we aver such acts encourage ... not only inefficiency and market distortion but also an atmosphere of questionable ethics."

The petition said "market-based" fixing of price ceilings indicated the government's "indifference" to the poor.


The Telegraph, 7 August, 2013, http://www.telegraphindia.com/1130807/jsp/nation/story_17204534.jsp#.UgHkLKzcjco


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