GoM okays proposal to bring 348 drugs under price control

The GoMs proposal will be sent to the Cabinet next week,Pawar said.

A group of ministers (GoM) led by agriculture minister Sharad Pawar on Thursday recommended replacing the rigorous and opaque cost-based price control of medicines covering a fifth of the retail market with a more benign pricing formula using the weighted average price of leading brands. The GoMs proposal will be sent to the Cabinet next week,Pawar said.

The Supreme Court a fortnight ago told the government to come out with a formula to regulate prices of all essential drugs and said if the latter fails on this,the court would pass an interim order.

The idea is to fix the price by taking the weighted average price of all brands in a segment with more than 1 per cent of market share by volume,fertilisers and chemicals minister Srikant Jena told reporters after the meeting.

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There would be periodical inflation-indexed revision of prices. The new formula will cover a little over a quarter of the Rs 65,000-crore retail pharma market. The moderate increase in the span of regulation wont be very painful for most firms as the method of regulation is less rigorous. Also,many of the medicines currently under price control will go out of regulation. Price control will be limited to 348 essential drugs (654 formulations of specified strengths) listed in the National List of Essential Medicines brought out by the health ministry in 2011.

The Cabinet will take the final view. We will send it in a weeks time, Pawar said.