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Pharma price controls hurt consumers -Subir Roy

-The Hindu Business Line

Public procurement at a negotiated price is a better option. Price curbs deter producers and don’t check pharmacy margins

The Government’s attempt to keep the prices of essential medicines affordable and curb the extraordinary returns earned by private healthcare providers through price controls has started an inexorable process whose end does not seem in sight. Will these moves eventually be counter-productive?

First came the move to extend the scope of what are considered essential medicines so as to bring a larger number of them under price control. Then came the move to impose a cap on the prices of medical implants — first coronary stents and then knee implants. This led to some foreign manufacturers of implants seeking to withdraw some products from the Indian market. The Government refused such permission for six months and over time the original applicants submitted fresh applications to withdraw their products after six months.

Now the question is, how long can you prevent manufacturers from withdrawing their products? Are they likely to introduce their newest products in India in future when they are globally released?

Taking a hit


US pharma manufacturer Johnson & Johnson has taken a $10 million hit in the September quarter on sales of knee implants as a result of price control in India, which it described as an “extreme example” of such action occurring periodically around the world. Also, AdvaMed, a lobby of US medical device manufacturers, has asked the US trade representative to cut duty concessions to Indian imports into the US under the ‘generalised system of preferences’ (GSP) in response to India capping cardiac stents and knee implant prices. Two Indian associations of medical device manufacturers have protested, adding that GSP is a multi-country arrangement and there is a downside to tinkering with it unilaterally.

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