India has been particularly concerned with high pricing of drugs in its market. They have previously activated compulsory licensing sanctions, denial of patents (evergreening in particular), and incentives for generics/biosimilars -- all aimed at keeping prices down to the consumer and the government payer, and promoting more competition (IP possibly be damned).
Now, they are raising the ante on drug makers they consider to be overcharging (gouging I suppose). The new policy and penalty?
Any drug maker found overcharging will have to shell out the entire sales revenue of the medicine from the date of its launch as penalty, according to a directive issued by the country's drug price regulator.
"If a company has not been booked for overcharging for selling the product without price approval, if any, pertaining to the period prior to fixation of the price of the said formulation, the entire sale amount from the date of introduction of the product till issue of the price notification order shall be recovered from the company, treating the entire sale proceeds as 'unauthorised sales'," the National Pharmaceutical Pricing Authority (NPPA) said (in fluent government-ese). Zounds!
The regulator said that action will also be taken in cases where the manufacturer and marketing company have failed to take prior price approval for sale of scheduled formulation packs. The NPPA has given state governments the authority to initiate legal action against companies found overcharging. While welcoming the move experts have raised apprehensions over the efficacy of the directive.
Experts don't seem to be concerned about the policy, they seem to be concerned with the ability to enforce. Double Zounds!
Posted by Bruce Lehr Oct 26th 2012.