Panacea or placebo?

IIPM International Student Exchange Programme

In an exclusive chat with B&E, Union Minister Ram Vilas Paswan spoke about the need to help the poor with affordable medicines

What has been your three year old government’s progress on reducing the prices of ‘life saving drugs’ (LSDs)?
Our ministry had prepared a draft Pharmaceutical Policy in 2006. We made the companies to agree upon reducing the prices of a total of 886 drugs. I am in full agreement with you that we did talk about lowering the prices of LSDs, and we have not forgotten that promise. Although in this list composed of 886 drugs, majority are generic medicines, but that does not mean that we have not tried to reduce the prices of LSDs. My recommendations are already placed to the Group of Ministers (GoM) and now the final decision depends upon them.

Where is the hitch?
As I have told you, the ball is in the court of GoM. I have written two letters to the Chairman of the Group Sharad Pawarji, requesting him to expedite the matter.

We are a signatory to WTO. How do you propose to impose price control on MNCs?
What to talk about the MNCs, we don’t even intend to impose any conditions on the domestic companies. The price of a drug is decided by the companies, we only advise them to reduce their profit margins. We are in the process of devising a way which is a win-win for both the companies as well as the consumers. The medicine prices are determined by the NPPA. Earlier, the pharmaceutical companies were allowed to set a profit margin within 100% of their total production cost. We have increased this limit to 150%. We have also granted another 50% margin for those engaged in R&D. Furthermore, medicines priced below Rs.3 have been kept out of the price control mechanism. What I fail to understand is that how does one not make a profit on a drug. A strip of 10 tablets of Cetirizine are produced at a rate of Rs.1.20 and it is sold at an exorbitant rate of Rs.36. I will not permit such loot.

Past history suggests that the companies have always found a way out to circumvent the price control.
First of all, nothing of this sort is going to happen now. The companies are only indulging in mere rhetoric. If the companies ever dare to defy, the government will not be afraid of taking them on. Earlier, the government had brought bulk drugs under price control, this time we have brought formulations under the ambit of control mechanism. Our aim is to destroy monopolies. We have promised to provide relief to the poor and at all costs we will fulfil our promise of providing affordable medicines to the downtrodden. depends .

Is it not better to first ensure domestic growth rather than trying to compel MNCs to toe our line.
We are bringing those companies under some control, which have a turnover of over Rs.4 crores, and market share of 90% and more. We need to pace up our growth but this does not mean that till the time we achieve adequate growth, we can let the poor to be squeezed.

Companies complain that your policy would adversely affect growth of the industry.
The countries they are talking about have a medical insurance policy for every individual. I have insurance cover provided by Parliament which meets my medical expenses. The majority in our country is composed of working class and not Ram Vilas Paswans. These companies are making noise because they have got into a habit of making obscene profits.

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit Below....
IIPM Mumbai Parables - Stories that change life
IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES
IIPM, GURGAON
ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
IIPM Economy Review
IIPM :- Cicero's Challenge is going global
The Indian Institute of Planning and Management (I...
Time for Awards at IIPM
STUDENTS AGAINST CORRUPTION & KICKBACKS : SACK
Heavy dut(t)y stress Sanjay Dutt Bollywood Actor
The Business of B-School Rankings & The Big Farce

Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.

• Hindustan Times Article - Publisher goes underground
• Rashmi Bansal (Editor of JAMMAG)
• Rashmi Bansal (Publisher of JAMMAG)