Prices Of 2 Drug Formulations Fixed At Half The Market Rates

The move is certain to cause a flutter in the market as leading companies like Cipla, Hoechst, Sun Pharma and others manufacture the various branded formulations. The industry has been pressing for the decontrol of these drugs.

Official sources, however, said the move to fix a lower price was taken in the interests of the consumer.

While the price of Pentoxyphylline-branded drug, Erytal, for ten 400 mg tabs is Rs 58.50, the new price recommended by the ministry of chemicals and fertilizers is Rs 24.14. The price of the same drug for a 15ml injection has been fixed at Rs 5.22 while the market price for a popular branded injection is Rs 11.09.

 

Similarly, the prices of Lynestrenol formulations like Lyndiol tabs and Orgalutin tabs have been fixed at Rs 7.40 and Rs 7.12, respectively. The market price for similar formulations are Rs 13.50 and Rs 26.30, respectively.

The sources said the data for price fixation were taken from the Bureau of Industrial Costs and Prices based on the feedback the ministry got from the market and consumers. The decision also included inputs like the present production levels in the country.

The government had sometime ago fixed the minimum allowable post-manufacturing expenses (MAPE) at 100 per cent of manufacturing costs from an earlier 75 per cent to 100 per cent for different drugs. The sources said the prices for the two drugs include an MAPE of 100 per cent.

An industry source expressed surprise at the reworked prices and said the government could expect a strong reaction after the notification. The price fixation mechanism was flawed as the government relied on outdated BICP data, he said.

In some cases, the BICP has used data nearly four years old to fix prices. Of late, all input costs had risen substantially following the hike in fuel prices. This should be taken into account while fixing prices.

In the West, post-manufacturing expenses are nearly 150 to 200 per cent.