Vigilance on drug pricing good but interests of Indian pharma industry should be safeguarded, says analyst

In response to the government of India’s constitution of Standing Committee on Affordable Medicines and Health Products (SCAMHP) issued last month, Prashant Khadayate, pharma analyst at GlobalData, comments: “This seems to be an extension of the Indian government’s objective to make drugs more affordable, especially for drugs not in the purview of price control. Previously, the Directorate General of Health Services (DGHS) had recommended to cap the trade margins on a list of 50 drugs, including 39 drugs being used in treatment of cancer and rare diseases.

“This is also the beginning of a new drug-pricing mechanism where the standing committee will recommend drugs prices, in cases where it’s deemed necessary, to the National Pharmaceutical Pricing Authority (NPPA). Mainly scheduled drugs are under price control as per the Drug Price Control Organization (DPCO). Earlier this year, an order was released by NPPA regarding exemption of innovative drugs from price cap for five years after the launch of drugs in the Indian market. Once the recommendations to reduce drug prices for cancer and rare diseases drugs are implemented through a government order, the order on innovative drug exemption will become invalid as per media reports.”

Negative effects of price cuts