It seems 2014 would be in very much focus with respect to affordability
of medicine as Indian Government is considering bringing the patented drugs
under price control. According to news, after sitting on it for years, the government is finally initiating
steps to regulate the price of patented medicines and medical devices, a move
that may provide relief to patients suffering from life-threatening diseases.
A committee comprising representatives from the
health ministry, pharmaceuticals department, the drug price regulator and
department of industrial policy and promotion is scheduled to meet early next
month to discuss at least three options, said an official familiar with the
development. While negotiated price mechanism, that was recommended by an
earlier panel and junked, is one of the options, the inter-ministerial
committee will also explore the possibility of reference pricing and
differential pricing.
Under a system of reference pricing, the
domestic price is linked to those in comparable markets. In case of
differential pricing, the government can fix separate prices for its procurement
programme and for purchase by others, including individual buyers.
Various countries, including developed ones,
use various tools to regulate prices, India controls prices of only a handful
of medicines and patented ones are not covered, often resulting in complaints
of over-pricing. During the period of a patent, only one company, which has
invented the medicine has rights to manufacture it and uses its monopoly rights
to fix the price.
Although a proposal to regulate the price of
patented medicines was floated several years ago, the government has refused to
move forward. In fact, an internal committee of the department of
pharmaceuticals had recommended a negotiated price mechanism for government
purchases and for use by insurance companies. The proposal was to link the
domestic rate with those at which governments in the UK, France, Canada,
Australia and New Zealand purchase drugs from the company that holds the
patent. The actual price was to be linked to the purchasing power in India.
But, this mechanism was only going to apply to
23% of the market, leaving a vast majority outside the proposed regime and
opening the proposal to criticism.
