From: <b class="gmail_sendername">shila kaur</b> <span dir="ltr"><<a href="mailto:kaur_shila@yahoo.com">kaur_shila@yahoo.com</a>></span><br><div class="gmail_quote"><div><div style="font-size:12pt;font-family:arial,helvetica,sans-serif">
<div>Health Action International Asia Pacific (HAIAP)<br><br></div><div><div style="font-family:arial,helvetica,sans-serif;font-size:12pt"><div style="font-family:'times new roman','new york',times,serif;font-size:12pt">
<div><div><div>
<div><b><font style="FONT-SIZE:15px"><b>Govt to regulate rates of
652 medicines; prices set to fall</b></font>NEW DELHI, 17 MAY, 2013:</b> India on Thursday notified new norms
that will bring down prices of essential medicines, increase the number of
drugs under price control, and alter the way the government regulates
prices in the domestic market. </div><div><table style="font-family:verdana;font-size:12px" align="center" border="0" cellpadding="2" cellspacing="0" width="99%"><tbody><tr bgcolor="#ffcaca"><td width="90%"><br></td>
<td align="right" width="10%"><br></td></tr><tr height="5"><td><br></td></tr><tr><td colspan="2"><div><div>The new regime will replace an 18-year-old price control order and come
into effect 45 days from now. The government will regulate the rates of
652 medicines, a substantial increase over the 74 bulk drugs and their
formulations that are currently under price control. The current method of
fixing prices on a cost-plus basis will be replaced by market price-linked
cap for each drug. Analysts said the new norms will adversely impact
multinational companies as well as local firms producing essential drugs,
but makers of niche drugs will not feel the pinch. Experts said many
companies would incur losses that would force manufacturers to revisit
business models. </div>
<div>"The new policy will adversely impact GlaxoSmithKline and Sanofi
Aventis the most. Bottom lines of domestic drugmakers such as CiplaBSE
2.62 % and Cadila would also take a hit. Least impacted will be companies
such as Sun PharmaBSE -0.44 % and LupinBSE 3.12 %," said Hemant Bakhru of
CLSA, a foreign brokerage firm.</div><div>The Indian Pharmaceutical Alliance (IPA), an industry body that
represents big Indian drugmakers, said its analysis of 270 medicines
showed that prices would fall by over 20% for half of the drugs. The
maximum price reduction could be as high as 88% for alprazolam, a
psychotherapeutic drug, and clopidogrel tablet, a cardiovascular drug.
Some HIV combination drugs would become cheaper by 70%. <br><br></div>
<div>At the heart of the new regime lies the ceiling price. This would be
calculated by taking the simple average of prices of all brands of a drug
with a market share of 1% or more. The maximum retail price of a drug
would factor in a margin of 16% to the chemist. The prices prevailing in
May 2012 will be taken as the reference point for calculating the caps.
Drug producers will be permitted an annual increase in the retail price in
sync with the wholesale price index. As ET reported in March, companies
selling medicines above the government-mandated ceiling rates would have
to slash prices to conform to the new rules, but those selling drugs below
the ceiling price wouldn't be allowed to raise prices. This will ensure a
fall in the prices of most essential drugs, and price increases in none.
</div>
<div><br>Firms that launch new medicines can sell them at or below
government-set price caps. Existing firms will not be allowed to stop
production of any drug without permission from the government. </div><br>Pharma firms would be allowed to increase the price of non-essential drugs
by 10% annually.
<div>The drug industry reacted cautiously to the new policy that
incorporates its proposal for a market-based mechanism, but threatens to
squeeze the margins of most producers.<br><br></div><br></div></td></tr><tr height="10"><td><br></td></tr><tr><td colspan="2"><br></td></tr></tbody></table></div></div></div></div></div></div></div></div></div></div>
<br>