Drugmakers Lobby for Lifting Price Caps on Cheap Medicines

15 Jul 2024 , 01:43 PM

The pharmaceutical sector has requested a government exemption from setting a ceiling price for any formulation that is inexpensive or costs up to ₹5 per unit. The advocacy organization Federation of Pharma Entrepreneurs (FoPE) also requested last week’s meeting to extend the current five-year price control exemption for patented medications to ten years. According to FoPE, a lot of businesses are carrying out research abroad in the lack of a 10-year exemption.

In its presentation to the secretary of the Department of Pharmaceuticals (DoP), FOPE stated that “all formulations sold at ₹5 per unit, i.e. per tablet, capsule, ml, or gm, may be exempted from provisions of ceiling price.” “This exemption is something that the business has long requested. “It would be preferable to permit small manufacturing units to remain exempt from the provisions of the Drug Price Control Order (DPCO),” an informed source stated. Prior to this, a number of lobby groups, including the Indian Pharmaceutical Alliance (IPA), which speaks for the nation’s largest pharmaceutical manufacturers, had requested an exception from the price ceiling laws for formulations that are more affordable.

Under the DPCO, the National Pharmaceutical Pricing Authority (NPPA) sets the maximum price for necessary Schedule I medications.

FOPE claims that the industry has been struggling with growing input costs. Certain important active medicinal compounds have seen price increases of 15–130% in recent years, according to specialists.

“Suitable price revision of ceiling prices may be considered due to statutory improvement in quality in circumstances like revision of Schedule M, improvement in pharmacopoeial monographs etc,” stated Harish Jain, president of FOPE.

Additionally, FOPE has suggested lowering the goods and services tax rate. “GST should be concurrently reduced on inputs like API, excipients, packaging material to 5%,” Jain stated. “Currently, there is an inverted GST structure wherein GST on finished product is 12% and on inputs and services it is 18%, leading to accumulation of GST credit and blocking of precious working capital at the manufacturers’ level.”

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