The Hindu Business Line : NPPA to monitor prices of drugs with Rs 1-cr turnover

IN a bid to prevent the unusual price hike of essential drugs, the Government has decided to monitor the price hikes of drugs with a turnover of Rs 1 crore. Currently, the National Pharmaceutical Pricing Authority (NPPA) monitors the prices of drugs that have a turnover of Rs 4 crore and above.

Under this new initiative, the Government will keep an eye on almost 80 per cent of the pharmaceutical market.

Speaking to presspersons after a meeting of the State Health and Finance Ministers, the Union Chemicals and Fertilisers Minister, Mr Ram Vilas Paswan, said, "Monitoring of prices does not mean that we are controlling them. We do not want to regulate prices or curb competition."

He added that while all the States wanted to make drugs affordable to everybody, representatives favoured the idea of controlling prices.

But on the issue of having a uniform sales tax, the States felt that the Empowered Committee to look into value-added tax (VAT) should decide on drugs as well. The Minister had asked the States to exempt them from local taxes or at least advance the implementation of VAT regime for drugs.

Mr Paswan also added that the consumer is bearing the burden of the huge margins being paid by pharmaceutical companies to traders. In the case of one particular drug, it was found that while the retailer was selling the pack at Rs 26; the cost of manufacturing was less than Re 1. He favoured printing both the manufacturing cost and the retail price on the medicine strip along with the expiry date.

The Ministry has already set up a committee under the Joint Secretary with representatives from the Health and Law Ministries to look into the issue of prices. A list of essential medicines is being prepared and the committee is expected to submit its report by October. Concern has also been expressed on the issue of spurious drugs flooding the market and the need for immediate action to curb this menace.