Healthy Skepticism Library item: 11994

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Publication type: news

Prasad GC.
Big pharma cos under MRTPC lens
The Economic Times (Indiatimes) 2007 Nov 12
http://economictimes.indiatimes.com/News/News_By_Industry/Healthcare__Biotech/Pharmaceuticals/Big_pharma_cos_under_MRTPC_lens/articleshow/2534033.cms

Full text:

NEW DELHI: The country’s fair trade regulator is planning to move against big pharmaceutical companies that overcharge consumers by abusing a provision in the drug law exempting small companies from price regulations.

The Monopolies and Restrictive Trade Practices Commission (MRTPC) is making a case against big companies that outsource production to smaller companies to escape price fixation by the drug price regulator.

The commission’s investigation wing has found ‘solid’ evidence against big companies escaping price regulation through outsourcing and is about to file its investigation report to the judicial body soon, sources said. If found guilty, the commission can ask the companies to stop the practice and can take action for contempt of court in cases of non-compliance.

This process is considered highly effective in tackling bad trade practices as opposed to lengthy prosecution proceedings or hefty fines that encourage companies to challenge the commission’s verdict in the Supreme Court, the only appellate authority.

Considering the rampant misuse of price-control exemption for small producers, recently the National Pharmaceutical Pricing Authority (NPPA) had started fixing industrywide ceiling prices for products instead of fixing prices for individual brands and exempting SSI brands.

The government also recently stipulated that brands will not get price exemption if it is manufactured by a small company and is sold by a non-SSI company. Big companies, however, found a way to flout this control as well. by removing their names from the label and selling their popular brand names to SSIs under some arrangement, the source added.

Besides, the large number of brands entering the market every month has proved to be a little difficult for the government to keep a close watch. SSIs often oblige bigger companies as their business is mostly dependent on them. Unfair practices in the pharmaceutical industry is getting greater attention among various regulatory agencies under different ministries with even the home ministry looking at some issues.