[Ip-health] Economic Times (India): Centre weighs Canada model for price regulation of patented drugs

[Thiru Balasubramaniam]

http://economictimes.indiatimes.com/News/News_By_Industry/
Healthcare__Biotech/
Centre_weighs_Canada_model_for_price_regulation_of_patented_drugs/
articleshow/1947362.cms

TIMES NEWS NETWORK[ TUESDAY, APRIL 24, 2007 04:40:40 AM]

NEW DELHI: Mandatory pre-marketing price negotiation for patented
drugs, a proposal in the new pharmaceutical policy now being vetted by
a group of ministers (GoM) headed by agriculture minister Sharad Pawar,
may dissuade inventor pharma companies from launching new patented
drugs in India. These companies are already hamstrung by the exclusion
criteria in the Indian patent law which forbid patenting of specified
=93incremental inventions=94 (modifications of an existing drug) unless
they substantially improve the efficacy of the product in question.

While the pharma companies, especially MNCs and including some leading
domestic companies who are resourceful in this sphere of R&D, are
anxious to ensure that the provision for price negotiation of patented
drugs is not endorsed by GoM, the chemicals and fertilisers ministry is
studying comparable systems existing in foreign countries to work out
the modality for such negotiation. Government sources told ET a model
being studied is that of Canada which regulates prices of patented
drugs.

The Patented Medicine Prices Review Board (PMPRB) of Canada, a
quasi-judicial tribunal which operates at arm=92s length from the
government, keeps a check on prices of patented medicines sold in the
country. The tribunal reviews the guidelines for drug pricing,
including patented drugs whenever there are major increase in prices.

=93A final call on whether there should be mandatory pre-marketing price
negotiation for patented drugs will be decided by GoM. If the proposal
is okayed by GoM, we will come out with the modality for the same,=94
said an official from the department of chemicals and petrochemicals.
He added that a check on prices of patented drugs did not violate the
TRIPS agreement. =93TRIPS do not bar any price control.=94

The official, however, added that the regime being considered in the
ministry is not that of rigorous price control but a much more liberal
regulation. The idea was to ensure that the patent owner did not take
undue advantage of the patent right and price the products unreasonably
high, he added. In Canada, the drug manufacturers need to pre-notify
prices of patented drugs to PMPRB. They are also required to notify
PMPRB in advance of price increases and justify it.

In India, the marketing approval for drugs are given by the Drug
Controller General of India who is attached to the health ministry.
Price regulation is done by the ministry of chemicals and fertilisers
and its attached office NPPA. Introduction of compulsory pre-marketing
price negotiation would require structured co-ordination between the
two agencies.

The draft pharma policy also proposed a tribunal for one-time
settlement of all pricing related disputes between the government and
the drug industry. In addition to the government=92s claims for recovery
of amounts from drug companies under the system of drug price
equalisation account, set up many years ago, claims of over Rs 1,300
crore, pertaining to violations of drug price control order, are being
stuck in litigation.

---------------------------------
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org