Chemicals ministry rejects plea for DPCO exemption

Sanjay Sardana

New Delhi, Aug 21: THE chemicals and fertilisers ministry has rejected health ministry’s plea seeking exemption of drugs from Drugs Price Control Order (DPCO) whose average daily cost works out to less than Rs 2.

It has also turned down the health ministry’s proposal of providing a 5 per cent additional cost for determination of controlled price. Instead, the chemicals and fertilisers ministry, on the recommendation of the task force on pharmaceutical and knowledge-based industries headed by Union minister for science and technology Murli Manohar Joshi, has allowed the additional cost of 10 per cent.

This would be applicable to a research and development (R&D) intensive company achieving ‘the gold standard’, which would be allowed additional cost of 10 per cent of ex-factory cost for the purpose of calculating the retail price of formulations.

However, the chemicals and fertilisers ministry has accepted the health ministry’s proposal of bringing down the criteria of calculating market share to 80 per cent from 90 per cent, for the purpose of identifying drugs for price control.

Further, as recommended by the health ministry, the cut-off date for determining whether a drug should be under the price control or not has been accepted as March 2001 against the earlier proposed date of March 1999.

A drug based on a Novel Drug Delivery System patent technology would be exempt from the price control under the DPCO and would be part of the new drug policy.

The chemicals and fertilisers ministry has further asked the Chandigarh-based National Institute of Pharmaceutical Education and Research (NIPER) to prepare a list in consultation with National Pharmaceutical Pricing Authority (NPPA).

The health ministry had asked that any drug, which has a large market share and is for a disease covered by the National Health Policy (NHP), should be done away with.

There are apparent differences between the two ministries as regards the extent of price decontrol with the health ministry wanting the control to remain on a larger number of drugs.
Also, the health ministry is in favour of using the department of revenue data on the turnover of drugs, which is one of the areas where the criterion for price control has to be applied.

According to industry sources, the rejection of the plea by chemicals and fertilisers ministry to exempt drugs from the DPCO whose daily cost works out to less than Rs 2 may come as a major jolt to drugs like ‘Avil’ of Hoechst Marion.