Indian government endorses plan to cap prices of 348 drugs

India’s Union Cabinet yesterday endorsed the Group of Ministers' (GoM) recommendations on the National Pharmaceutical Pricing Policy (NPPP), in move that will have ramification not only on the pharmaceutical industry but also on the interests of patients, according to reports in the local press. At present, the government through the NPPA controls the prices of 74 bulk drugs and their formulations.

The government did not give out the details of the Cabinet decision on the pharma pricing policy.  However, according to sources quoted by the Business Standard, the Cabinet has imposed a cap on the prices of 348 essential medicines at the arithmetic average of prices all drugs in a particular segment with more than one per cent market share, in line with the GoM’s new recommendations. The new policy is expected to cover up to 30 percent of the total drugs sold in the country

Earlier, the GoM had recommended a price cap based on weighted average of all drugs, which would have reflected the price of expensive drugs with better market share more than those with a lower market share. The GoM’s suggestions also included that any company changing the composition of the 348 essential medicines by adding a new ingredient to the formulation would come under price control and would have to seek permission from the pricing authority.