Half drug market under Government control

Chiefs of big domestic drug makers have pointed out serious inconsistencies in the new drug policy to the government and said that about half of the total market would freshly come under government control as against the policy's claim of just 7% to 8%.

The Indian Pharmaceutical Alliance (IPA), representing big drug makers like Ranbaxy, Wockhardt and Sun Pharmaceuticals said that this policy is based on inaccurate data and wrong assumptions and it would be far more damaging to them than the chemical minister's claims.

In the next few days, the industry body will reason with the Planning Commission and revenue department, which are examining the draft cabinet note, to amend these polices. Market research agency, ORG-IMS Pvt Ltd conducted a study and revealed that just 189 of the 663 are now coming under price control and would account for 13% of the total market. The entire 663 drugs would cover half the market.

The study also shows that control free drugs' production in the last three years has grown twice (10 % CAGR) that of price controlled drugs (5.6 % CAGR). This shows the declining ability of price controlled drugs.

The policy was passed by the Supreme Court and it said that all the essential drugs should be price controlled. The policy brought in a list of essential drugs under price control and retained the existing one. During the first year of implementation of the policy, the margins of the manufacturers' are different.

Mr. Shah, secretary general of IPA questioned that can't the companies claim the higher of the two for the 45 drugs which are common to both the lists. The policy prescribes 150 % for essential drugs and 100 % for market dominating drugs.

IPA also told the government that it is an inconsistency to control only a specified strength of a medicine while leaving another free. The policy controls the price of 74 ingredients, which brings 1,600 formulations containing one or more of them, under state control.