Price controls and compulsory licences lead to double trouble in India
04 October 2012
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Peter Leung, Hong Kong
Last week, an Indian panel of ministers proposed that that the government put all 348 drugs on the country’s National List of Essential Medicines under price control, including a number of patented drugs. The structure of the scheme provides incentives to target patented drugs on the list
The panel was made up of a number of government ministers and headed by Agriculture Minister Sharad Pawar.
The National List of Essential Medicines lists 348 medicines and 489 formulations, and by some estimates makes up over 50% of total healthcare costs in India. If the Cabinet approves the proposal, all the drugs on the list would be brought under price control compared to just 37 at present.
Under the panel’s proposal, the maximum price for each drug will be calculated using a weighted average price method, said Rachna Bakhru of Ranjan Narula Associates in Gurgaon.
The price of a drug will be based on the average price of the same drug sold by the companies having 1% or greater market share, she explained. “So if a multinational sells a version of the drug for Rs100 per dose, and a generic sells a version for Rs50, and they both...
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