NGO to challenge drug price control over lacunae

While the decision by the Sharad Pawar-led group of ministers (GoM) on Thursday to regulate the prices of 348 essential drugs looks people-friendly at first glance, it has many complications and lacunae, say experts, who are far from happy with the move.

In fact the All India Drug Action Network, the non-government organisation that forced the government to regulate the prices, is reportedly set to challenge the pricing mechanism finalised by the GoM in the Supreme Court.

The GoM decided to recommend to the union cabinet fixing retail prices of the 348 drugs at the "weighted average price" of brands that have more than 1 per cent market share. But Colin Gonsalvez, the lawyer who is representing the health group, says, "Market-based pricing is ridiculous. It is actually abandoning drug regulation."

Gonsalvez said under the proposed policy, the maximum retail prices of most essential drugs would rise to around the existing retail prices of costlier brands in a segment. This would legitimise the high pricing of popular brands, he said.

Acting on a petition by the health group, the Supreme Court on 11 September rapped the government for sitting on the policy for 10 years. The court asked the government to fix the policy by 27 September, adding that if it fails, the court will pass an interim order. The court was due to hear the matter on Thursday but it was postponed.

Health groups are demanding continuation of the existing methodology of fixing prices of drugs using the cost of production criteria. They had opposed a market-based policy even at the draft proposal stage. In their response to the pharmaceutical department's October 2011 draft proposal, which planned to fix the ceiling of retail prices using the average of brands method, they had termed the proposal against the spirit of the court order.