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New drug price order may bring in monopoly

Though the Central Government’s new drug price order has been welcomed by various sections of society, experts in the field point out that the new price regime would bring in monopoly in the sector.

Published: 24th May 2013 10:29 AM  |   Last Updated: 24th May 2013 10:30 AM   |  A+A-

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Though the Central Government’s new drug price order has been welcomed by various sections of society, experts in the field point out that  the new price regime would bring in monopoly in the sector.

Not only will it weaken the Drugs Control department, but is also against   the interest of retailers.

The Department of Pharmaceuticals in the Union Ministry of Chemicals and Fertilizers has notified the Drugs (Prices Control) Order 2013 which had been in the works for a long time recently.

The new drug price order has  brought 348 drug formulations under the price control regime.

While the earlier drug price control order covered only 74 bulk drugs and formulations, the new one brings 348 formulations under its control.

As per the new price control order, the ceiling price of an essential drug will be the simple average of all brands with a market share of at least one per cent. The retailers will have 45 days to sell off their stocks at the current rates.M R Pradeep, assistant drugs controller, Ernakulam said the new drug price control order is beneficial to a large extent as it will bring more drugs in the price control regime.

“Drugs for cancer, diabetes, heart-related diseases and urinary diseases will now come under price control. But, large companies will get a monopoly in pricing as they can manipulate price structure together. The retailers will also loose their profitability. The Drugs Control Department in the state too have limited control over pricing of essential drugs,” he said.

According to the latest notification, the final price of the drug is arrived by adding the average of the prices of all the brands that have one per cent market share, local taxes and a 16 per cent profit margin to the retailer. The new drug price list is yet to be published by the Department of Pharmaceuticals.

The experts in the industry point out that the small players in the field will eventually be wiped out when the new price control regime will come into effect.



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