has obtained a copy of the draft Drugs Act, which arms
the government with sweeping powers over drug prices.
CNBC-TV18's exclusive report on what's in store for the
Indian drug industry.
are sure to become more affordable for Indians. The government
is arming itself with the power to regulate prices of
drugs, and not only those produced in the country but
also imported drugs in segments such as cancer and heart
plans to do this by bringing in a legislation to control
drug prices. CNBC-TV18 learns that a new Act called the
Drugs Price Regulation and Control Act has been drafted.
This would replace the current system of price orders
issued under the Essential Commodities Act.
intention is clearly to ensure that patented drugs meet
the health care needs of the nation and are made affordable.
This move seems intended to curb the profit motive of
new Act will empower the government to seek cost data
of all drugs, whether manufactured domestically or abroad.
The Draft Act also proposes that patented drugs can only
be sold after companies negotiate prices with the government.
The negotiated price will then be the maximum selling
price including taxes.
Act, if passed in its current form, will empower the government
to control prices of drugs manufactured in India or abroad
for as long as it wants. And in a case of Health emergencies
or when there is an urgent requirement of a particular
drug, prices could be further reviewed.
government would also determine different sets of prices
of drugs, one that will be sold at market price and another
sold to the Government for public health needs. Importantly,
certain medical devices like 'stents', which are becoming
increasingly popular for heart patients and are often
higly priced will also be brought under the price control.
to regulate production and distribution of drugs, manufacturers
could also be told to sell bulk drugs to other manufacturers.
Companies could also be asked to furnish information on
bulk drugs and formulations to the government whenever
it deems fit. Those manufacturers, who do not comply would
government would also fix trade margins for distributors
and retailers from time to time. In keeping with its promise
to boost original research, the government has also made
enough provisions to reward innovative research done by
drugmakers within the country.
government will also have the power to approve a brand
name and can prevent changes in composition of products
marketed under approved brand names. The Act also provides
for a Drugs and Pharma Appelate Tribunal to be set up
for the settlement of cases of price overcharging.
tribunal would hear all appeals against orders passed
national pharma pricing authority. The intention is not
just to temper pricing powers of manufacturers but also
to check abuse of regulatory powers. The Draft Act has
been circulated to key ministries - comments from whom
are expected by the month end.