The Union government’s decision on pricing of 348 essential drugs has come in for sharp criticism from Jan Swasthya Abhiyaan (JSA), a network of NGOs working in public health. The NGO has alleged that the government’s move will only result in legitimising the exorbitantly high prices of essential drugs and there will be only ‘token’ reduction in their prices.

"We are deeply disappointed that after a delay of seven years to decide on a comprehensive drug pricing policy, the group of ministers (GoM) has decided in favour of market–based pricing policy for 348 essential drugs. This would more or less legitimise the current exorbitantly high prices of essential medicines, " said health activist Anant Phadke of JSA.

Responding to a petition filed by the All India Drug Action Network (AIDAN), the Supreme Court in 2003 had directed the government to devise a policy that would ensure that essential medicines are available at affordable cost to ordinary people. Recently, while hearing arguments on this petition, the court had said the government should continue to use the cost–based formula for pricing of the 348 essential drugs.

The cost–based formula has been part of the Drug Price Control Order (DPCO) of 1979, 1987 and 1995. Under this formula the ceiling price of a drug is calculated by adding a mark–up (maximum allowable post–manufacturing expenditure on the cost of manufacture of a drug.

"The GoM has, however, recommended that the costbased pricing policy be replaced by a market–based formula. This method will fix the ceiling prices of medicines by calculating simple average of prices of brands of medicine having more than one per cent market share. This is a clear ploy to minimise the reduction in drug prices and allow pharmaceutical companies to continue to charge inordinately high prices for their products, " Phadke said.

Phadke added, "It is appalling that the GoM has chosen to ignore the views of the Supreme Court and the ministries of health and finance. "

"The GoM, formed in 2005, took seven years to make a decision in spite of directives by the court to expedite its decision. The delay allowed the pharmaceutical industry to continue to charge exorbitant prices, thus exploiting millions of patients. Due to the inaction by the GoM, the constitutional right to life with dignity of ordinary citizens continued to be violated. With this new decision, this violation would become ‘official’. "

Health activist Abhay Shukla said, "Exorbitant pricing by pharmaceutical companies leads to denial of access to essential medicines, and this constitutes denial of the right to life, enshrined in the Constitution. "

"Though policy–making is the prerogative of the executive, the Supreme Court has acted well within its constitutional mandate in directing the government to take a policy which would stop the denial of the human rights of millions of people, " Shukla said.

The court’s suggestion is to protect human rights of citizens. Ignoring it shows the disrespect for the court and the Constitution, he said, adding that, "It’s tantamount to contempt of the SC. "

• The government should heed the Supreme Court’s opinion and impose price regulation to protect the right to life enshrined in the Constitution
• All escape routes used to wriggle out of the price regulation must be plugged. Thus, all dosage forms of all 348 essential medicines and all fixed dose combinations of these medicines must be brought under price–control (all irrational fixed dose combinations should be banned). Otherwise, in practice, the price regulation would be largely nullified
• The government should immediately set up a committee of experts to list crucial medicines that (a) have been left out of the current list of essential medicines and (b) have been included in the essential drug lists of states but not included in the National List of Essential Medicines and ensure these are included in an expanded list of essential, life saving drug