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In 2015, The Supreme Court’s described India’s drug pricing policy as irrational and unreasonable. There are many issues with drug pricing of essential medicines. To some extent, there is a debate over control on prices of essential medicines vs. industry interest.
Let’s take some back2basic concepts related to the issue
Basically, it is a mechanism to regulate the prices of drugs, especially of essential medicines. The Centre issued Drugs (Price Control) Order, 2013 to regulate the prices of drugs. It initially brought under price control 652 medicines or formulations based on 348 bulk drugs listed under the National List of Essential Medicines (NLEM).
The Drug Price Control Order, 2013 expanded the scope of regulation to 60% of the $22-billion Indian pharmaceutical market. The new DPCO, which replaced the 1995 version ( 1995 version covered 74 bulk drugs and their formulations) increased the span of controls more than threefold.
Under the existing DPCO, price ceilings for 348 NLEM drugs are set using the ‘market-based’ mechanism. While price increases of NLEM drugs are restricted to be in line with or below the wholesale price index, the non-NLEM products are allowed a maximum price increase of 10% in any one-year period.
National Pharmaceutical Pricing Authority is an organization under Union govt, responsible to fix/ revise the prices of controlled bulk drugs and formulations.<Bulk Drugs are ingredient in a pharmaceutical drug that is biologically active and it is also the central ingredient>
It also enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.
Essential medicines are those that satisfy the priority health care needs of the country’s population. They are generally based on the country’s disease burden, priority health concerns, affordability concerns etc.
In India, National List of Essential Medicines decides the essential medicines. It is a dynamic list and is reviewed every 3 years to include or exclude drugs as relevant to the newest medical innovations and aligned to market competition.
The ceiling price of essential medicines has been fixed based on the weighted average of the prices (MRP) of all brands of that drug that have a market share of at least 1%. If any medicine is priced lower than the ceiling fixed by the regulator, then companies selling such drugs should maintain the existing or lower retail price.
Industry is seeking a 5-year exemption from drug price control as these ‘ad hoc’ measures will hinder the growth of the pharma sector. The exemption will incentivise investments in the sector, because industry is trying to invest in expansions, scale up and creating global scale.
There is a need to overhaul India’s intellectual property rights regime. The soon-to-be-announced National Intellectual Property Rights Policy will, hopefully, have a positive impact here.
Published with inputs from Pushpendra
What is a Fixed Dose combination?
Wait and watch as this debate enfolds. The counter argument by companies was that their brands had been in the market for decades, with some even producing no objection certificates (NOCs) granted by the central drug regulator for their combinations. If NOCs etc. are not being honoured by govt. would this not go against the private-public trust?
This move will ensure their availability across the country at affordable prices.
The committee will look into the pricing of medicines, and specifically in the market based pricing formula.