The Telegraph
Since 1st March, 1999
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Price leash on life-saving drugs

New Delhi, March 10: The Supreme Court today allowed the government to go ahead with the implementation of its new pharmaceutical policy but sought details of steps taken to maintain price caps on life-saving medicines.

Dissatisfied with the spiralling prices of life-saving drugs, the apex court has asked the solicitor general to submit a list of essential medicines included in the DPCO (drug price control order), which is part of the policy.

The Supreme Court asked for the list while staying the Karnataka High Courtís order putting on hold the implementation of the Pharmaceutical Policy-2002 till such a list was worked out by the government.

The avowed objective of the pharmaceutical policy was to ensure availability of good quality medicines at reasonable prices.

The public interest litigation (PIL) filed with the Bangalore High Court had charged that in tune with the Pharma Policy-2002, the new DPCO list will fail to bring several key life-saving drugs within the ambit of price controls. The matter was sent to the apex court and the government had filed a special leave petition, defending its stand on the proposed order.

Pharmaceutical policy 2002, says that bulk drugs with a turnover of more than Rs 25 crore and market share of 50 per cent or more, will remain under price control. Bulk drugs with a turnover of between Rs 10 crore and Rs 25 crore but market share of 90 per cent or more would remain under price control. But other bulk drugs can be priced freely.

The price control of bulk drugs is governed by the DPCO of 1995. Unlike in the past when the essential nature of the drug was the only primary criterion, the new economic criteria of market share and turnover could see many essential life-saving drugs being taken out of the price control list.

Non-governmental organisations fear this could lead to rampant profiteering by pharmaceutical companies leaving poor consumers in the lurch.

In this yearís budget, the list of imported life-saving drugs on which the government levied a countervailing duty (CVD) of 16 per cent has been exempted from this duty. These drugs will now attract only 5 per cent basic customs duty they used to attract but not the CVD. The exemption is actually a corollary of the governmentís decision to exempt the domestic manufacturers of life-saving drugs from the 16 per cent excise duty. In effect, the budget has benefited both domestic makers and importers of life saving drugs.

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