‘Imported drugs sold at ‘supernormal’ profits’

A Parliamentary panel today asked the Department of Pharmaceuticals to finalise a new phama policy without delay and evolve a mechanism to regulate prices of new imported patented drugs.

Written by Agencies | New Delhi | Published: May 8, 2012 8:02:50 pm

A Parliamentary panel today asked the Department of Pharmaceuticals to finalise a new pharma policy without delay and evolve a mechanism to regulate prices of new imported patented drugs.

The Committee on Health and Family Welfare held that with Working Groups having already submitted their reports,the new pharma policy should be finalised “without further loss of time”.

Noting that new imported patented drugs are sold at “supernormal” profits,whereas prices of the same medicines are considerably lower in other countries,the Committee recommended the “issue of price regulation of imported molecules being sold in the country at high prices will be taken care of in the new pharmaceutical policy which is currently under finalisation”.

Rejecting the Pharma Secretary’s submission that there is no price control of a patented drug for open market,the Committee said “it would like to observe that India as a sovereign country has every right to decide the prices of drugs which are sold in the open market.”

Expressing concern over lack of mechanism to regulate prices of new imported patented drugs,the Committee,headed by Brajesh Pathak,held the issue “too urgent to be left open-ended” and asked the Department of Pharmaceuticals to resolve the issue within six months.

“The Committee would also like the Department put in place an effective mechanism to enable the use of international price benchmarks in such cases and limit the price of an imported drug by comparison with the price of the same drug in other countries and thus check windfall profits made by importers on selling imported molecules at exhorbitant prices in the country,” it recommended.

The Committee also recommended prevention of takeover of domestic compaies by MNCs and thus preventing in-house manufacturing capability in the country and asked the government to make all-out efforts to arrest the trend of acquisition of domestic pharma companies by foreign MNCs.

“No stone should be left unturned towards developing and gearing up all public sector pharma companies for production of cheaper quality generic drugs by giving them full functional autonomy and adequate financial support so that requirement of the country’s public health sector be met and likely impact of acquisition of domestic companies is neutralised,” the panel held.

The panel sought taking up the matter on top priority and asked for revisiting the FDI policy and complete the study on impact of takeover of domestic pharma industry earliest.

Holding that it is no secret that promotional costs are loaded into price of drugs,the Committee welcomed the move to frame a uniform code of pharmaceutical marketing practices and recommended that decisive action to ake the code mandatory so that effective check could be put on huge promotional costs.

The Committee also recommended that the Ministry of Health and Family Welfare be involved in implementation of the code of conduct in pharmaceutical marketing and not just the Department of Pharmaceuticals.

It also requested the Department of Revenue to examine the issue of penalising drug companies indulging in unethical promotion of drugs and asked the Health Ministry to pursue it.

Observing that high medicine prices are one of biggest obstacles towards access to affordable treatment,the Committee also reiterated its earlier recommendation of initiating the process of examining the issue of a blanket cap on profit margins of all medicines across the board.

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