Indian committee proposes adjusted reference prices

The Committee on Price Negotiations for Patented Drugs in India recommended the country adopt a per capita income adjusted reference pricing system for prescription drugs, but noted that such a system would still make drugs too expensive for many. The committee, which was formed by India's Department of Pharmaceuticals, said as a result the government should also expand insurance coverage to all citizens not already covered by private plans, according to a report released earlier this week.

The report recommended adjusting the prices of drugs launched in India since 2005 based on reference prices for drugs in Canada, U.K., France, Australia and New Zealand -- countries that have "wide" health insurance coverage by their governments and therefore "high" bargaining power -- with adjustments made to reflect India's per capita gross national income (GNI) with purchasing power parity. According to the World Bank, in 2009 India's per capita GNI was $3,590, or 9% of the $39,660 in Canada, the reference country with the highest per capita GNI. The committee proposed using a reference pricing adjustment ratio as a starting price in pricing negotiations for new drugs with no therapeutic equivalent. Prices for drugs with therapeutic equivalents would also be negotiated but these drugs could not cost more than the equivalent marketed drug, according to the report. ...