The prices of 348 drugs will come down drastically, as the Centre has notified the Drug Prices Control Order(DPCO), 2013, with effect from May 15.
The medicines, prices of which will go down, currently have a turnover of Rs 29,000 crore per year which amounts to about 60 per cent of the total domestic market. The new order will lead to 40 to 75 per cent reduction in the cost of drugs for cardiovascular, cancer treatment and kidney ailment.
On November 22, 2012, the Union Cabinet had approved the National Pharmaceutical Pricing Policy(NPPP), which was notified on December 7, 2012. The policy will be implemented by the National Pharmaceutical Pricing Authority (NPPA) as per the provisions of the DPCO, 2013.
Till May 15, 2013, only 74 drugs were under the price control regime. But as per the DPCO, 2013, the government has come out with a National List of Essential Medicines(NELM) which will bring prices of 348 drugs under control, which would be decided on the basis of simple average pricing of all medicines sold in the market. Speaking to the Express on the new DPCO, 2013, Kiran Muzumdar Shaw, chairman and managing director, Biocon, said: “The new policy does not create a level playing field and is unfair to manufacturers who put money into manufacturing facilities and research. The government should consider ‘weighted average’ while taking a decision on the pricing of drugs.”
Shaw said that there are many small companies which enter the drug manufacturing sector by using excess capacity of other bigger manufacturers, these companies do not invest in research, manufacturing facilities and other expenses bigger firms make.