The pharmaceutical companies may suffer sales loss of Rs 3,000 crore (Rs 30 billion) if the government's span of control increases, as proposed in the new pricing policy for the medicines, a section of the industry said on Monday.
In its memorandum to the Department of Pharmaceuticals, Indian Pharmaceutical Alliance (IPA) said the draft National Pharmaceuticals Pricing Policy (NPPP) 2011, would increase government control over 75 per cent of the drugs sold in the country.
"The IPA estimates that domestic price reductions alone will result in aggregate loss of sales of nearly Rs 3,000 crore (Rs 30 billion), to the industry," the IPA
said.
It said that NPPP 2011 proposes to add 1,154 drugs and 6,441 formulations. This would amount to raising the span of government control to 75 per cent, against 60 per cent of the retail market, as indicated in the NPPP.
"The proposed additions will enlarge the scope of price regulation by over eight times the current volume to about 68,000 packs making the task unwieldy and ineffective," the IPA said.
Drug price reductions in the country will also have corresponding impact on export realisation as the importers benchmark their purchase price to the domestic market.
"Thus, it will hurt exports too," it said. The government wants to bring a new pricing policy with an objective of ensuring affordable medicines to the people.
