The Hindu Business Line : `Covering more drugs under price control will lead to costlier imports'

THE Indian Drug Manufacturers' Association (IDMA) is hoping that the Centre does not carry forward the proposal to bring under price control a wider range of pharmaceutical products.

In an informal chat with Business Line, the IDMA's President, Mr Yogin Majmudar, said that expanding the purview of price control order to over 300 drugs — as the Union Minister for Chemicals and Fertilizers, Mr Ram Vilas Paswan, has been saying he that would do — would only pave the way for costlier imported drugs coming into the market.

Now over 74 drugs were under price control, and the manufacturers who produced these drugs had to sell them at wafer thin margins. They offset this loss by producing other drugs that were not controlled. If price control were expanded, they simply would not produce these drugs. The demand would be met by imported drugs, whose prices would not be subject to similar controls, according to Mr Majmudar.

However, the IDMA was open to monitoring of prices rather than control. The National Pharmaceutical Pricing Authority, which keeps a close watch on prices, has pulled up the industry on more than 30 occasions when the prices of particular drugs shot up. The industry has also responded by rolling back prices on 12-15 occasions, he said.

As it is the new product patent legislation comes into effect from January 1, 2005, when local manufacturers would not be able to produce patent protected formulations. The IDMA is hoping that the Centre brings in the concept of compulsory licensing. If the patent holder licenses other manufacturers to produce and market the drugs for a royalty, it would serve as a market intervention mechanism. Patent holders can continue to make a profit without profiteering.

In addition, the manufacturers must not also be prevented from making the formulations that they are now producing. Some of these issues are likely to be addressed at a meeting of the IDMA representatives with Mr Paswan on September 10, according to Mr Majmudar.