The Centre's recent clarification that it has no plans to reduce the prices of essential drugs is welcome news to the pharmaceutical industry. The government has also clarified that there is no plan to change the existing mechanism to fix medicine prices. Currently, only 17 per cent of the total domestic pharma market, in value terms, comes under direct price control.
Of 6,000 formulations, the government fixes prices of only 850. In 2013, the government acceded to the industry demand that ceiling prices would be based on the average retail price of all the drugs in a particular category. Also, the Health Ministry's list selected only 'Essential Drugs' for price control.
The only problem for the pharma industry is that civil society groups have challenged this methodology in a case before the Supreme Court.Joe C. Mathew