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In
Pipeline: New Drug policy
By the year end (2005)
Indian government is likely to announce a new Drug Policy encompassing
Drug Pricing, Funding and Tax policy. The proposed policy is likely
to be converted into a statute. This is seen as a significant
step in an environment where the Patent Act,1970 has been changed
after 35 years by introduction of a product patent regime.
In the year 2002
an attempt was made by the government to bring in Pharmaceutical
Policy 2002 - which , inter alia, dealt with price of essential
drugs. However, shortly after it was announced it was challenged
in the Karnataka High Court and the Supreme Court and till date
has not been implemented.
Some of the
salient measures recommended in the new policy are:
Price Control:
In the wake of introduction
of the product patent regime in India, price control of essential
drugs has gained importance.
The government is
planning to amend the existing Drug Pricing Control Order, 1995
("DPCO") in view of the recommendations by the
Sandhu Committee and special task force for drug pricing. DPCO
is issued under the Essential Commodities Act, 1955.
The Task Force was
created by the Prime Minister of India to arrive at a consensus
with the Pharma industry to ensure low-cost drugs for the Indian
masses without stifling the global dreams of companies and the
Sandhu Committee, was constituted to compile a list of drugs that
would be brought under price control.
Sandhu committee's
suggestions would deal with price control issues, trade margins
and bulk purchases. It has recommended that whenever a new drug
is patented its price should be negotiated to keep it at a reasonable
level. There has been some debate in respect of definition of
the term "life saving". The special task force is likely to recommend
on debranding of generics as mentioned by the official from chemicals
and petrochemicals ministry.
The policy also proposes
to strengthen, the National Pharmaceutical Pricing Authority ("NPPA"),
the monitoring of executive body of the DPCO. NPPA is an organization
of the Government of India, which was established, inter alia,
to fix or revise the prices of controlled bulk drugs and formulations
and to enforce prices and availability of the medicines in the
country, under the DPCO. The organization is also entrusted with
the task of recovering amounts overcharged by manufacturers for
the controlled drugs from the consumers. It also monitors the
prices of decontrolled drugs in order to keep them at reasonable
levels.
Establishment
of funds:
The government is
contemplating to set up a fund to disburse loans to small companies
which likely to be affected by recent implementation of the Good
Manufacturing Practices to upgrade and modernize their plants.
Government website:
This website would
be listing the prices of generic equivalent drugs giving opportunity
to consumer to buy the drugs at the cheapest price. This move
will increase the public awareness and promote debranding.
Illness assistance:
Under this program
the below poverty line (BPL) families will be insured for free
treatment.
Research and Development:
To boost the Research
and Development ("R&D") activities, it proposed
to have a tax rebate of 200 per cent for an extended period of
10 years considering the massive R&D expenditure pharma companies
would incur in new patent regime era.
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Source:
Business Standard August 12, 2005
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