Centre`s new drug pricing policy comes under SC scanner

New Delhi: National pharmaceutical pricing policy to fix the ceiling price of essential medicines came under judicial scrutiny with the Supreme Court today seeking explanation from the Centre for fixing it on the basis of market rates.

Agreeing to examine the validity of policy, the apex court sought response from Centre on a PIL alleging that the new policy would result in increase of prices of essential and non-essential drugs.

Referring to the petition, a bench of justices G S Singhvi and V Gopala Gowda said that under the new policy the margin of profit for drug manufacturer and dealer has become 10-1300 percent.

The court was hearing a PIL filed by NGO All India Drug Action Network which contended that MBP (Market Based Pricing) is never used for any price regulatory purposes and under the new policy simple average ceiling prices are in many cases higher than the market leader price.

It sought direction to Centre to continue with cost based ceiling prices of all essential drugs.

"Pursuant to orders of this court to the effect that government should bring all essential medicines under price control, Centre expanded the list of medicines to be brought under control.

"However, at the same time it has effectively undermined this court`s directive that medicines should be made affordable for the common man. It has done this by making a pretence of price control by introducing MBP," it said.

It also contended that National List of Essential Drugs consists of only 348 drugs and left out many essential medicines from price control.

The NGO had sought direction to the Centre to bring medicines specially used in HIV AIDS, cancers, mental health, chronic non-communicable diseases like asthma and rheumatoid arthritis, under price control mechanism and pleaded for implementation of the Tamil Nadu model of public procurement to ensure all these essential drugs are available free of cost to those seeking treatment in public health facilities.

The apex court also pulled up the Centre for "dilly dallying" on the issue of price fixation for the last 10 years and saying that nothing was done by the Centre despite various committees including parliamentary committee deliberating on the issue.

It had earlier asked the Centre not to alter the existing pricing system for essential medicines, a step which may lead to a steep hike in their prices.

"We make it clear that the government should not alter the price system as notified on July 13, 1999 and similar subsequent notification," it had said.