Lower India price tag may help drug MNCs

The recent trend among global pharmaceutical companies to launch patented medicines with India-specific price tags that are less than international prices may help the companies in the long run.

A government committee that is looking into the possibility of pre-marketing price negotiation for patented medicines is likely to recommend a lenient view on such medicines, it is learnt.

The committee, headed by a deputy secretary in the Department of Pharmaceuticals, had taken note of this voluntary price reduction and would suggest faster marketing approvals for such products, said a senior Chemicals and Fertilisers Ministry official.

The committee is finalising its report after a year-long interaction with various industry associations and civil society groups. It is also monitoring similar price control mechanisms in other countries.

The Indian subsidiary of US-based Merck recently announced the launch of its cervical cancer vaccine, Gardasil, at less than half the price it charges its US consumers. Similarly, the world’s biggest drug-maker, Pfizer, launched its blockbuster erectile dysfunction medicine, Viagra, at a much lower price than the US price tag.

The official said the lenient attitude towards such products would be just one component of the committee’s suggestions, which are to be finalised soon.

Once the recommendations are endorsed by the ministry, the report will have to be submitted to the Group of Ministers headed by Agriculture Minister Sharad Pawar that is looking into the draft pharma policy so that it is incorporated into the new policy guidelines.

The price negotiation became essential after India changed its patent law and gave protection to “products” instead of “processes”.

While Indian companies were earlier able to manufacture low-cost versions of the same drug through different processes, medicines launched under the new patent regime cannot have such low-cost copies until the expiry of the patent protection.

The government intends to put in place a system that can ensure that drug companies are not charging prohibitively high costs for such new medicines.