[Reader-list] Drug Prices?!

[A. Mani]

http://newsclick.in/india/nefarious-design-legitimise-exorbitant-prices

“Draft National Pricing Pharmaceutical Policy, 2011”

\Quote
The proposed policy starts with a radical and welcome proposal that
all drugs (348) in the National Essential Drug List brought be brought
under price control. But this proposal hides a much more nefarious
design that seeks to legitimize the rampant practice of profiteering
in the pharmaceutical market. It does so by proposing that henceforth
prices of medicines shall be fixed based on “market based” criteria.
Till now, drug prices were fixed by using a ‘cost plus’ formula. The
price of the finished product sold in the market was fixed by
calculating the cost of manufacturing and then by placing a ceiling on
the post manufacturing expense. The post manufacturing expense (MAPE)
allowed included the profit for the company – as per the 1995 DPCO it
stands at 100%. Thus if the cost to manufacture a formulation is
Rs.1.00, it can be sold at Rs.2.00.

The new policy makes two significant departures from the existing
methodology of calculating the price of a medicines.

1) It will only fix the prices of formulations (finished medicines
sold in the market) and not of bulk drugs (raw material used to
manufacture the finished product)
2) It will not use the earlier cost-plus formula but shall use what it
calls “market based” pricing

\unQuote


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A. Mani
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A. Mani
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