Medicines to cost 80% cheaperBusiness News

May 17, 2013 14:31
Medicines to cost 80% cheaper

After a very long wait, the government has decided to pass the highly delayed drug price control order which implemented the pharmaceutical pricing policy. As a result, the everyday medicines on average had a price reduction of 20-25%. A few essential life saving medicines were cheaper by almost 80%.

The regulation of prices of the drugs has affected 652 formulations which fall under 27 categories of medicines likeanti-allergic (cetrizine), cardiac (aten), gastro-intestinal medicines (ocid), pain-killers ( paracetamol) and anti-diabetic drugs (insulin) are expected to come down. Many others like anti-fungal, anti-tuberculosis, anti-leprosy, anti-hypertensives and cancer drugs also are under the list. A few cancer drugs particularly are the most benefitted with up to 80% reduction in prices.

DPCO was not ready ealier though the policy to regulate the prices was approved by the cabinet back in November last year. The DPCO 2013 will revamp the cost-based system of market and adopt the market-based system of pricing medicines to regulate the prices starting May 16.

With the new order, that outmodes the 1995 policy which controls only 74 bulk drugs, the National Pharmaceutical Pricing Policy 2012 can regulate prices of 348 essential drugs.

In the weeks to come NPPA will set the ceiling prices for 652 formulations in the nation and the industries will be given 45 days of time to adopt the new prices after clearing their stocks.

According to market-based pricing method: 'the simple average method' for determining the ceiling price of all the molecules (drugs) under a particular therapeutic area with over 1% market share. The price to the consumer will be determined by adding 16% margin (to the retailer) as well as the local taxes to the average price (ceiling price). In case a new drug enters the market, depending on the pharmacoeconomics of the medicine, the price will be regulated by the new policy. Pricing of the medicines will remain consistent for an year and shall be regulated every April if the need be.

(AW- Anil)

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