This could mean pharmaceutical companies would have to seek initial price approval from the regulator before launching products, a government official said.
“The idea is to ensure companies do not gold-plate drugs to exorbitantly increase prices while introducing those in the market,” the official told Business Standard.
Companies often gold-plate drugs by adding extra ingredients or through different kinds of packaging and conversions, etc.
This creates a huge differential between the actual cost of production and the sales price.
In the current price regulatory mechanism, there is no way to curb such practices.
At present, only 74 bulk drugs are under direct price control of the government.
The regulator fixes the prices of these drugs and medicines containing these bulk drugs.
For all other medicines or non-scheduled drugs, companies are free to fix the initial price.
Although once introduced in the market, companies could raise prices by 10 per cent annually, it leaves a major loophole in the price regulatory system, allowing firms to launch products at a very high price.
“The current mechanism is not enough to monitor prices of medicines because the non-regulation of the initial price is a major loophole,”
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