Business logic clashed with political sentiments on Tuesday as Union minister Ram Vilas Paswan and leaders of the pharmaceutical industry clashed over price controls, which industry leaders saw as overly intrusive while some saw in a planned new policy a return to some kind of nationalisation.
"There is still a wide gap between the reasonable prices and affordable prices in a country such as India where almost 30 crore of its population lives below the poverty line," Chemicals and Fertilisers Minister Paswans said at an industry conference organised by the Associated Chambers of Commerce and Industry. "I ask you to have more heart."
The issue is back in focus after the minister charged the industry of “breach of trust” last week for going back on its assurance to voluntarily reduce prices of generic drugs manufactured after October 2 this year.
“We are not going back on our assurance. Drugs have a pipeline of manufacturing. All we are saying is that give us some more time. We expect the prices of generic drugs to come down by January," Swati Piramal, director of Nicholas Piramal, told Hindustan Times.
Piramal said the world was moving away from cost-based price controls and is looking at issues such as providing health insurance, while India seemed to be clinging on to old practices.
{{/usCountry}}Piramal said the world was moving away from cost-based price controls and is looking at issues such as providing health insurance, while India seemed to be clinging on to old practices.
{{/usCountry}}Ramesh Adige, Executive Director of Ranbaxy Laboratories Limited (RLL), echoed similar views.
“We never said we would not bring down the prices. While large companies have announced a reduction and submitted a list to the government, there are more than 20,000 companies in India that produce drugs. The government may think of bringing out guidelines but at the same time it should not enforce a notification," he said.
The pharmaceutical industry has submitted to the government a list of 886 drugs on which it would impose a cap of 15 percent on wholesale margins and 35 per cent on retail margins.
Satwant Reddy, secretary, department of chemicals and fertilisers, said drug prices were a complex matter, in which the interests of various stakeholders had to be balanced. While taking care of industry, government cannot remain indifferent to the price of drugs and their affordability, he said.
Differences emerged between the government and industry on the proposed national pharmaceutical policy.
"The new draft policy is not in tune with industry growth with all the regulations and pricing control mechanisms proposed. This is de-facto nationalisation of the private sector with all government controls," said Kewal Handa, who is the Managing Director of Pfizer India.
A 14-member committee of government officials and industry representatives is examining the draft pharma policy and is expected to submit its report by the end of this month.
gaurav.choudhury@hindustantimes.com