Centre's new drug pricing policy comes under SC scanner

National pharmaceutical pricing policy to fix the ceiling price of essential medicines came under judicial scrutiny with the Supreme Court today seeking explanation from the Centre for fixing it on the basis of market rates.

Agreeing to examine the validity of policy, the apex court sought response from Centre on a PIL alleging that the new policy would result in increase of prices of essential and non-essential drugs.

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Referring to the petition, a bench of justices G S Singhvi and V Gopala Gowda said that under the new policy the margin of profit for drug manufacturer and dealer has become 10-1300 percent.

The court was hearing a PIL filed by NGO All India Drug Action Network which contended that MBP (Market Based Pricing) is never used for any price regulatory purposes and under the new policy simple average ceiling prices are in many cases higher than the market leader price. It sought direction to Centre to continue with cost based ceiling prices of all essential drugs.

"Pursuant to orders of this court to the effect that government should bring all essential medicines under price control, Centre expanded the list of medicines to be brought under control.

"However, at the same time it has effectively undermined this court's directive that medicines should be made affordable for the common man. It has done this by making a pretence of price control by introducing MBP," it said.

It also contended that National List of Essential Drugs consists of only 348 drugs and left out many essential medicines from price control.