Indian drugmakers say new drug pricing policy will hamper industry's growth

The Indian government’s new pharmaceutical pricing policy recently proposed by the Ministry of Chemicals and Fertilisers will create distortions in the market and hamper the industry's growth, some drugmakers and regulatory experts have claimed, reports the Economic Times of India.

Currently, the prices of only 34 essential medicines, accounting for around 20%-30% of the market, are under government control. However, the proposed National Pharmaceuticals Pricing Policy 2011 would cover and regulate all 348 products on the 2005 National List of Essential Medicines (NELM) plus others added to the newly-updated List (NELM-2011), which includes some 450 products. This will cover 60% of drugs sold in the country.

The policy also proposes a shift from fixing the ceiling price based on cost of production to the reference pricing method. Critics of the new policy, comments on which have been invited till November-end, say the policy will favor foreign drugmakers and big Indian multinationals.