"Market-based pricing policy will encourage investment in quality and hence patient safety. This is extremely important given the problem of counterfeit drugs plaguing the country and the lack of confidence in generic drug quality in the medical community and amongst patients," it said.
At present, the government through the National Pharmaceutical Pricing Authority (NPPA), controls prices of 74 bulk drugs and their formulations. But it is planning to change the price mechanism system for drugs which has come under severe criticism from the Supreme Court.
The apex court, which is hearing the case on the issue of price mechanism for essential drugs, had asked the government on October 3 not to alter the existing pricing system for essential medicines, a step which may allegedly lead to a steep hike in their prices.
The proposed drug pricing policy aims to bring 348 essential drugs under price control of the government was earlier approved by the Group of Ministers on September 27 and was subsequently sent to the Cabinet but was deferred following objections from the Finance Ministry.
The draft drug pricing policy aims at fixing prices based on weighted average of prices of all brands, which have more than 1 per cent market share.
A panel of ministers, headed by Agriculture Minister Sharad Pawar, is expected to meet this week to fine tune the drug pricing policy.
Assocham said that a drug price control policy must be carefully calibrated which ensures quality and affordablility, besides providing an enabling industry growth.
Further, it said, market-based pricing would be based on widely available information in the public domain as against individual manufacturer level production.
After being unable to frame a policy for price control of essential drugs in its previous term, the UPA-II government had last year circulated a draft National Pharmaceutical Pricing Policy 2011 through the Department of Pharmaceuticals.
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