The pharmaceutical industry is perturbed by the government’s proposal to increase the number of medicines under price control. While no time frame is set, a committee is already in place.

The Drug Price Control Order (DPCO) 2013 controls the price of 348 medicines deemed essential under the National List of Essential Medicines (NLEM).

“One hopes the new committee applies the same criteria because if they differ, it will be a piquant situation of different criteria at different times,” an industry expert said.

Drugs under NLEM account for Rs.15,000 crore or a fifth of the total Indian market. “Why should a policy that is not even two years old be tinkered with?” Dilip Shah, Secretary-General, Indian Pharmaceutical Alliance (IPA), told this correspondent.

Speaking to The Hindu, S.V. Veeramani, President, Indian Drug Manufacturers’ Association (IDMA), said it was too early. “We have just come to terms with DPCO 2013 and even now, prices of only around 400 of the 645 drug formulations have been determined.”

Mr. Shah said the government should first evaluate the impact of the earlier order on availability and prices and see if the objectives were met. A compensatory mechanism must also be in place to ensure that companies are not reluctant to invest or hike production, he said.

Gaurang Shah, VP-Research, BNP Paribas Financial Services, felt the existing price controls had already impacted company bottom-lines by 2.5-3 per cent. “Though we will have to watch how many more drugs are brought under price control, it will certainly have a negative impact on companies’ margins in the short to medium term.”

The NLEM has already impacted industry growth. “We grew a mere 6 per cent last year from double digits the previous year, Mr. Veeramani said. “Any decision must be taken in consultation with manufacturers.”

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