The Burrill Report


The Indian government is moving to implement a new drug pricing policy that could result in up to 90 percent cuts on the prices paid for some imported drugs, according to a report in The Economic Times of India.

The Indian Department of Pharmaceuticals issued a draft policy that would place a ceiling on drug prices for certain medicines that fall under the country price control policies. The draft policy would base pricing on the average price of the three top-selling brands in a given segment at the time the policy is implemented.

The paper says the new policy is an attempt to close a loophole in the nation’s current drug pricing policy that allows foreign drugmakers to fix prices based on their declared landed costs, a figure regulators are unable to verify, The Economic Times said. There are more than 1,000 drugs manufactured by foreign companies sold in India today.

As an example, the newspaper pointed to Novartis cancer drug Glivec, which sells for $2,450 (INR 120,000) per month. Novartis would have to cut Glivec’s price to the average price of its three top-selling competitors, which includes three generic drugs. If Glivec were among the top three, it would be cut to $980 (INR 48,000). If were not among the top three, its price would be cut to $245 (INR 12,000).

“The proposal is unfair and unreasonable," Tapan Ray, director general of the Organisation of Pharmaceutical Producers of India, a trade group representing multinational drugmakers, told The Economic Times of India. He said the pricing policy is not practical because the cost of production is significantly more in western countries and it’s impractical to expect them to set up production facilities in every country in which they sell.



November 04, 2011
http://www.burrillreport.com/article-proposed_indian_pricing_scheme_could_slash_prices_on_foreign_drugs.html