Reuters: Regulatory News: UPDATE 1-India recommends price control for 348 essential drugs

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UPDATE 1-India recommends price control for 348 essential drugs Sep 27th 2012, 14:21 Thu Sep 27, 2012 10:21am EDT * Recommendation to be sent to cabinet in a week- minister * Combinations of 348 drugs not under price control * Panel proposes market-based price ceiling formula * New policy to regulate prices of 27 pct drug sales By Annie Banerji and Kaustubh Kulkarni NEW DELHI/MUMBAI, Sept 27 (Reuters) - An Indian panel of ministers has recommended price regulation for 348 drugs deemed essential, up from 74 earlier, a federal minister said, a move that is likely to hit prices of costly brands sold by domestic as well as multi-national drugmakers. The panel has finalised the proposal and it would be forwarded to the cabinet within a week, telecommunications minister Kapil Sibal told reporters on Thursday. The ceiling price of a particular drug would be calculated by taking the weighted average of the prices of all the brands with a more than 1 percent market share, Srikant Jena, junior minister of chemicals and fertilisers, told Reuters. Multiple combinations of the 348 essential drugs would not come under price control, Jena said. The new policy, if approved, would regulate prices of about 27 percent of the total drugs sold in India, Nomura said in a note. Shares in drugmakers like GlaxoSmithKline Pharma and India's Ranbaxy Laboratories, Cadila Healthcare and Dr Reddy's Laboratories are expected to see price corrections if the policy is finalised, Nomura said. The maximum price for 74 drugs covered by the old policy would be calculated using a cost-based formula and not the market-based pricing, he said. India is the world's fourth-largest drug market by volume and 14th largest by value. The country's annual drugs sales are about 650 billion rupees ($12.1 billion) at the retail level, while government agencies buy about 110 billion rupees of medicines at discounted rates every year. U.S.-based Abbott Laboratories has the largest share of India's drug market, followed by India's Cipla. Patented drugs are not covered by this policy, though India is considering a mechanism to regulate prices of medicines which are covered by patent protection. Link this Share this Digg this Email Reprints

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