India's Supreme Court calls drug pricing 'irrational' in lawsuit over access to meds

Amid industry discomfort over current price caps in the country, India's Supreme Court has asked the federal government to take another look at its essential medicines policy. But if the order results in any price changes, they're likely to be in the wrong direction for drugmakers.

A group of nongovernmental organizations challenged India's approach to setting prices on essential medicines, saying that the costs are too high. The NGO group, All India Drug Action Network (AIDAN), also claims that the current list of essential meds, which covers 680 drugs, doesn't include many lifesaving drugs, The Times of India reports.

The nation's high court ordered AIDAN to come up with a proposal for regulating drug prices, due within 6 weeks. The government would then have 6 months to respond to that plan.

Drug costs and access to medicines have been big issues in India in recent years, as the country's healthcare system has expanded and demand for treatments increased. Despite price caps and some discounting on the part of Big Pharma, some therapies remain too expensive for Indian patients to afford.

Some domestic drugmakers have challenged foreign companies' patents, and patent officials have nixed IP protections for a variety of Big Pharma drugs. The Indian government has also issued one compulsory license, which forced Bayer to allow Natco Pharma to produce a cheap version of its cancer treatment Nexavar. Other compulsory license applications have failed, and one remains pending.

Meanwhile, the government has been pushing down prices over the past year, in moves that have prompted protest among domestic and foreign pharma companies.

But as the Supreme Court said Wednesday, the federal government's essential medicines pricing can be far higher than the caps set in the states. "The formula does not seem reasonable and rational," the justices said, citing some pricing that is 4000% higher than those set by the states of Tamil Nadu and Kerala. Recently, the state of Punjab said it would fix its own prices for essential and generic drugs.

Former India NPPA chairman Injeti Srinivas

In April, the head of India's National Pharmaceutical Pricing Authority was sacked, one week after his agency allowed the prices of 509 essential drugs to go up by 3.8%. The now-former NPPA official had been playing hardball with drugmakers about meeting data and registration deadlines. Big Pharma companies have challenged NPPA's authority to extend pricing caps to new drugs; last year, the government pulled the agency's power to make unilateral pricing and coverage decisions.

- see the Times of India story

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