Draft Pharma Policy Hikes Price Control Turnover Limit To Rs 20 Crore

The draft pharmaceutical policy, 2001 has recommended price control on bulk drugs with a turnover of over Rs 20 crore and 50 per cent market share. In case of drugs with turnover of between Rs 5 crore and Rs 20 crore, a 90 per cent share with a single formulator will invite price controls.

While the Rs 20-crore limit is a significant increase from the earlier limit of Rs 4 crore turnover, the pharma industry is in favour of a still higher turnover limit for price control. A limit in the range of Rs 30-35 crore would be preferable, say industry officials.

In a note which will be sent to the Cabinet Committee on Economic Affairs, the ministry of chemicals and fertilisers has recommended that the maximum retail price printed on formulation packs should be limited to 40 per cent over the sale price to the wholesaler.

The provision was included in order to check overcharging in the generic drug market. The draft policy states that while this ceiling should not be made obligatory, it should be enforced through the internal guidelines of the National Pharmaceu- tical Pricing Authority (NPPA).

The policy also proposes to remove the present provision of limiting profitability of pharma companies. Currently, the NPPA specifies the maximum allowable profit margin that a company can make on the basis of its turnover.

The draft also specifies that in case of drugs which are not included in the price control list, but are part of the essential drug list, or are used in national health programmes, the NPPA will monitor the price movement and consumption pattern.

The draft has, however, kept the maximum allowable post manufacturing expenses (MAPE) for indigenously manufactured formulations at 100 per cent as against the Drug Price Control Review Committee