More drugs may be added to essential list, subjected to price caps

Written by Reuters | Mumbai | Updated: Jun 25 2014, 08:26am hrs
The government is likely to raise the number of drugs deemed essential and subject to price caps, people directly involved in the process said.

A panel formed by the health ministry is meeting for the first time on Tuesday to consider adding more drugs to the list of essential medicines, all of which would then come under price caps, one of the people said. The move would make the drugs more affordable in a country where 70% of the people live on less than $2 a day.

Making more drugs subject to price caps will draw the ire of global drugmakers like Pfizer, GlaxoSmithKline Plc and Abbott Laboratories, all of which have a large presence in Indias $15-billion pharmaceutical industry.

The global drugmakers have already been hit by wide-ranging government-imposed price reductions and a legal system with a history of disallowing patent protection in recent years in an emerging market that is a vital growth driver for the firms.

Bringing more drugs under price controls would dash hopes for an easing of the populist drug policies of the previous government under new, business-friendly Prime Minister Narendra Modi, industry analysts said