INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

PATENTED PILLS LIKELY TO TURN CHEAPER FOR INDIA

PRICES of medicines that would get patent protection in India in due course would be sold cheaper than their lowest international prices. For this, India is working on a system under which prices would be significantly lower than that in Canada, where its government negotiates with pharmaceutical corporations to sell patented drugs cheaper than anywhere else in the world.

The guidelines for such negotiation, which the chemicals and fertilizers ministry is working on, will translate these prices into probable Indian prices by taking into account the purchasing power of both the currencies. In India, drugs that fight cancer and the body's urge to reject an organ after a transplant are the costliest ones, and would be the most likely candidates for mandatory negotiation.

A committee appointed by the ministry to evolve norms would meet for a second time in early April to freeze the norms. It has already asked the body of MNC drug makers in India, OPPI, to submit suggestions. The panel has three months to evolve the guidelines.

Before negotiations start for a particular brand, for example, Lipitor, the top selling drug in the world, the government would identify the price of an inexpensive generic substitute for Lipitor in Canada. Then the premium Lipitor enjoys over the substitute would be calculated. This premium would be translated into rupee terms by considering the purchasing power of the currencies. The starting price for negotiations would be the Indian price of the Lipitor-substitute plus this premium.