New Delhi, Jul 7 (UNI) ASSOCHAM today urged the government to allow pharma companies to hike prices of non-schedule drugs by 20 per cent each year in view of rising input costs, as the industry is facing stiff competition in domestic and international market.
The chamber said with undue regulatory pressure on the domestic pharma firms, many life savings drugs are likely to go out of production, if the government does not take immediate corrective measures.
Under the regulatory mechanism at present, the pharma companies are not allowed to hike non-schedule drugs prices by permissible limits of 20 per cent each year, instead the cap has been brought down to 10 per cent.
The ASSOCHAM has called for the PMO intervention to advise the Ministry of Chemicals and Fertilisers on this issue in order to permit the domestic pharmaceutical firms to increase prices of non-schedule drugs by 20 per cent each year.
Chamber President Sajjan Jindal said what is even worse is that the concerned Ministry is threatening the industry by bringing non-scheduled drugs under price control, even when there is healthy competition.
He said if this hostile attitude of the government continues towards pharmaceutical industry, many more MNCs would devour the domestic pharma units just as Ranbaxy was recently taken over by Japenese firm Daiichi Sankyo.
The price control policy, particularly for Active Pharmaceutical Ingredients (API) manufacturers for the 33 price control products has steadily declined, the chamber said.
Recently, the Chinese government has cracked down on intermediate API manufacturers and stopped exports of those not adhering to strict pollution control norms.
According to ASSOCHAM, the currency fluctuation between the dollar, rupee and yuan have also adversely impacted raw material prices. The crude oil price increase has further adversely impacted input prices of raw materials for packaging like plastics and PET.
Raw material prices of commonly used antibiotics like Ciprofloxacin, ofloxacin and cefixime have risen by 25 per cent, while commonly used antiulcerants like famotidine have risen by 50 per cent.
Finally, travel costs and manpower costs have risen substantially. In this light, a price control policy that puts a cap on even non-scheduled drugs and which does not allow price-control drugs to increase prices linked to inflation, is causing severe setback.
The consequent repercussions like lack of investment in new manufacturing, over dependence on China, shutting down are causing loss of employment.
UNI SBA SG RN1740