India caps prices of 36 more drugs to improve access: government official

Mumbai: India has capped the prices of 36 drugs, including those used to treat infections and diabetes, in its latest move to make essential medicines more affordable, a senior official of the country's drug pricing authority told Reuters on Friday.

The medicines join a list of 348 drugs deemed essential and that are therefore subject to price caps, covering up to 30 percent of the total medication sold in a country where less than 20 percent of people are covered by health insurance.

"This is a straight-forward, most predictable, overdue action which has been done by us," the official at the National Pharmaceutical Pricing Authority (NPPA) said, declining to be named because of the sensitivity of the matter.

Global and Indian drugmakers have been hit in India by wide-ranging government-imposed price reductions over the last year. Industry officials say prices in the country are already among the lowest in the world, but the cost of drugs is overwhelmingly covered by patients themselves.

India in July capped the prices of more than 100 drugs that are not part of the essential medicines list. The pharmaceutical industry has challenged the move in court.

Indian drugmakers, including Cipla Ltd, Ranbaxy Laboratories Ltd, and Cadila Healthcare Ltd, are among the companies that will be affected by the latest decision, research firm AIOCD Pharmasofttech AWACS said.

Cipla said the implementation of the new price rules has impacted its domestic business and the company continues to take measures to mitigate its effect. Ranbaxy declined to comment, while Cadila did not respond to Reuters requests for comment.

An official at the Department of Pharmaceuticals, which controls the drug pricing authority, confirmed the price cap move on Friday, but declined to give details.

Ciprofloxacin, a common antibiotic that is sold by many companies including Ranbaxy and Cipla, is among the drugs whose prices were capped by the latest order. The research firm said the cap would shrink the drug's market value by 51 percent.

More to come

More big selling drugs for treatment of diseases including cancer, HIV/AIDS and cardiovascular could be brought under price cap to make them affordable in the country, said Rahul Sharma, an analyst with Mumbai-based brokerage Karvy Stock Broking.

The senior official at the pricing authority said the NPPA was drawing up a list of mass-consumed, essential life-saving drugs which it thinks should be added to the essential medicines list, but did not confirm treatments affected.

People directly involved in the process had told Reuters in June that the government was likely to raise the number of drugs that are in the essential medicines list and subject to price caps to improve affordability.

The authority's recommendations will be sent to health ministry by mid-October, the official said on Friday, adding one such proposal is to include Ranitidine tablets, widely used to treat duodenal and gastric ulcers.

Ranitidine is sold by companies including local unit of GlaxoSmithKline Plc and India's Torrent Pharmaceuticals Ltd and Ranbaxy. The companies did not immediately respond to request for comment.

"Only injections are covered in the list ... we checked what is happening and saw people are taking tablets. We are saying please cover tablets," the official said. "Nobody is a control freak. If it is essential, we have a job to do."