Drug Policy Hobnailed

The Bangalore High Court’s ruling on the Pharmaceutical Policy 2002 should not come as a surprise to the drug industry. Those in the know of this legal situation were aware that the bureaucrats in the Department of Chemical and Petrochemicals were reluctant to defend their own policy agressively in the court of law. Though the actual premise on which the High Court has reportedly ruled the policy as “arbitrary”, “unreasonable” and “unconstitutional” is not known since the copy of the judgement is not yet out, the onus of this debacle fully lies on the Department for its improper defense. If this was not the case, then how does one expect the High Court to rule against a policy, especially when the Supreme Court has mentioned in the Balco case that courts have no jurisdiction over policy matters. To an extent, this case indicates the mindset of the government and its reluctance to deviate from populist measures, however reasonable. The damage is done. Even if the government files a modified Special Leave Petition in the Supreme Court on 25th November as stated, it could easily take another six months before the new DPCO is announced, provided the Supreme Court quashes the Bangalore HC verdict.

The Pharmaceutical Policy 2002 resulted after much debate within the government and the industry alike. Importantly, the new policy is consistent with the government’s stated committment of scaling down the rigours of price control over a period of time. The new policy, thus, aims to reduce the span of control from 38 per cent to 20 per cent by shifting 44 drugs outside Schedule 1 of DPCO. Also, the government has agreed to a new formula suggested by the industry whereby drugs with an annual turnover exceeding Rs 25 crore and the share of the largest brand consisting the said drug is more than 50 per cent will be put under price control. The arguement is that this formula automatically puts widely-used therapeutic products (the so called essential drugs) under the controlled category. The only weak link in the model is that the data for the proposed excercise will be sourced from a private party, which in this case would be ORG-MARG. But, in the absence of any other source of information, the formulators of the policy and the advocates have little choice. The existing mechanism is archiac and is more arbitrary and complicated. The government, in order to show its commitment to its stated principle should now pursue the matter aggressively if it has to show it is serious in implementing it’s commitments. The industry has done its bit. Let it not continue to suffer endlessly.