Government Removes Price Cap on Innovative Drugs for First 5 Years

The government on Thursday exempted innovative medicines developed by foreign companies from price control for five years, giving Indian patients access to drugs that are currently only available abroad. These include orphan drugs that are used for treating rare medical conditions. In amendments to the Drugs Price Control Order (DPCO), the ministry of chemicals and fertilizers exempted producers of new drugs patented under the Indian Patent Act, 1970 (39 of 1970) from price regulation for a period of five years from the date of commencement of its commercial marketing by the manufacturer in the country. Non-profits criticized the decision. “It’s a shocking move in an election year. That will deliver dividends to foreign companies for the foreseeable future and shrinks the policy space for government to make highly expensive medicines for life-threatening conditions more affordable to the public,” said Malini Aisola, co-convenor of All India Drug Action Network. The move will restrict the government from putting expensive drugs under price control regardless of a public health emergency, according to an expert.

DPCO lays down the rules for regulating the prices of medicines through a National List of Essential Medicines, known as Schedule-I of DPCO. While any medicine that is included in Schedule-I automatically qualifies for price control, DPCO earlier exempted patented medicines that have been developed indigenously for a period of five years. The US Trade Representative (USTR) in April announced that it was reviewing the generalized system of preferences (GSP) eligibility of India after the US dairy industry and the US medical device industry requested a review of India’s GSP benefits, complaining that Indian trade barriers affected US exports in these sectors. The Advanced Medical Technology Association in its submission to USTR seeking suspension of GSP benefits to India wrote that its members were deeply concerned about the “draconian” Indian price controls on coronary stents and knee replacement implants, prices of which had been slashed by as much as 85 percent and 70 percent, respectively. – Livemint

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