New Delhi, 4 Oct 2013: The government's new drug pricing policy came under the scanner Thursday as the Supreme Court sought an explanation over the latest pricing formula for essential medicines and questioned if market driven forces had an effect on it.
A Bench led by Justice G S Singhvi said it will "test" the rationale behind the new Drug Price Control Order to fix the ceiling price of essential medicines on the basis of average market-based pricing. It demanded an answer on why the new policy, which intends to put a cap on prices of 348 medicines, changed the formula for deciding the cap from a cost-based mechanism to a market price-based mechanism.
"This DPCO will encourage profiteering of medicine brands prescribed by the doctors. It seems the government is being guided by market-driven forces. You will have to explain the rationale," the Bench said.
Additional Solicitor General Sidharth Luthra denied that it will lead to higher drug prices, saying the policy barred companies selling cheaper drugs from raising their prices significantly. But senior advocate Colin Gonsalves, appearing for the petitioner, NGO All-India Drug Action Network, alleged that under the new policy the margin of profit for manufacturers and dealers has increased.
The court asked him to place the data by Tuesday when the case will be taken up for further hearing.
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