The Hindu Business Line : Drug cos may be allowed to fix prices

The new Pharmaceutical Pricing Policy may give companies more flexibility in fixing prices. Instead of the National Pharmaceutical Pricing Authority (NPPA) fixing the prices of certain drugs based on the cost of the raw materials, the companies may be allowed to do so. However, they would have to file their pricing structure with the Authority.

According to sources in the Chemicals and Fertilisers' Ministry, "We are looking at the model followed by the Income Tax Department where an individual tax payer files his papers based on self-assessment and the Department scrutinises the returns randomly. Similarly, we could consider allowing the pharmaceutical companies to fix the prices on their own but submit their cost-structure to the NPPA. The Authority will then choose a few applications for further inspection."

This, they said, would reduce the burden on the NPPA. Currently, the Pricing Authority fixes prices of 74 bulk drugs and derivatives.

As part of its monitoring activity, the Regulator regularly examines the movement in prices of non-scheduled formulations.

The monthly reports of market research agency ORG-IMS and the information furnished by individual manufacturers are utilised for this purpose.

However, the Government also plans to impose stiff penalties on erring companies.

"If companies are caught over-charging, they would have to pay stiff penalties that will increase with every offence. The penalties have yet to be finalised," said the sources.

So far companies charging more were merely asked to deposit the over-charged amounts with the NPPA.

The Government is in the process of finalising a new pharmaceutical policy wherein different models to regulate prices of different category drugs are being considered. These include creation of a separate hospitals supply medicine list.

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