The Government of India has withdrawn its authority over setting up prices of non-essential medicines, a senior official at the National Pharmaceutical Pricing Authority (NPPA) told Reuters on Tuesday.
However, the price cap on over 108 non-essential drugs by NPPA in July will not be changed. Due to this, the profit margins of Ranbaxy Laboratories, Sanofi SA, Merck and Co Inc, Pfizer Inc and Abbott Laboratories are likely to hit for the month of July, reported Reuters.
The price capping was regulated to improve the accessibility of generic drugs across the nation where more than 80% of India's population have no health insurance while over 70% survives with less than $2 per day.
The NPPA added 36 new drugs to the list of 348 medicines this month earlier. The list constitutes about 30% of medicines sold in India. The 108 non-essential drugs subject to July's price cap is apart from the essential medicines list.
This decision came a few days ahead of Prime Minister Narendra Modi's first visit to the United States after winning the elections in May.
Pharmaceutical drugs-based relations between India and US has not been without friction so far. Indian drug-maker Ranbaxy was slapped with million-dollars worth of fine with not following USFDA norms.