Kiran Mazumdar seeks 5 year exemption from drug price control

Biocon CMD Kiran Mazumdar-Shaw today took a huge step to enable the pharma sector to build scale to be globally competitive she asked the government to refrain from 'ad hoc' measures and sought a five year exemption from drug price control.

Mazumdar-Shaw, who was here to attend the meeting of Board of Trade, said: "When we are trying to invest in expansions, scale up and creating global scale, we need exemption from price control at least for a period of five years."

Explaining the rationale for such a demand, she told PTI: "This will incentivise investments in our sector because I really believe that this sector is trying to build global scales."

Criticising the manner in which the government has tried to bring more medicines under price control, she said: "The moment you introduce price control on products that we are investing in a very ad hoc way, I think this also disincentivises investment."

Later on speaking to reporters after the meeting, she said: "How do you incentivise the pharma sector if you are going to bring in drug price control (in an ad hoc manner)?"

She further said: "If you are making a huge investment, you need a certain returns on investment (RoI), you need be to be assured of that RoI but suddenly mid-term you cannot impose a price control."

During the Board of Trade meeting, which met after a gap of three years, she said it was discussed "how do we bring in policies that give you some stability and predictability in what your investments and return of investments can be."

In 2014, the National Pharmaceutical Pricing Authority ( NPPA) had brought prices of over 100 non-scheduled drugs under price control invoking paragraph 19 of Drug Price Control Order.

Several industry bodies, including Indian Pharma Alliance ( IPA), had criticised the NPPA's move to cap prices of medicines not under the National List of Essential Medicines ( NLEM).

Currently, the government has increased the number of drugs under price control to over 800 formulations, from 628 earlier, bringing medicines used for treatment of diseases such as cancer, HIV/AIDS, analgesics and cardiovascular diseases under its purview.

Stressing on exports, which is a main area of focus, she said it was discussed on how to make "our SEZs more competitive and how do we really focus on the pharma sector, which has already got a global stature and really built greater scale, to make us very very strong and competitive."

(Image credits: indiatimes)