Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

At first, Kerala sets up drug price monitor


Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From the UPSC perspective, the following things are important:

Prelims level: PMRU and its mandate

Mains level:  Need for an effective Pharma price monitoring agency


  • Kerala has become the first State to set up a price monitoring and research unit (PMRU) to track violation of prices of essential drugs and medical devices under the Drugs Price Control Order (DPCO).
  • The move comes more than five years after the National Pharmaceutical Pricing Authority (NPPA) proposed such a system for the States and the Union Territories.

Price Monitoring and Research Unit (PMRU)

  1. A society had been registered to get Central assistance for the functioning of the unit.
  2. The State Health Secretary would be the Chairman of the society and the Drugs Controller would be its member secretary.
  3. Its members include a State government representative, representatives of private pharmaceutical companies, and those from consumer rights protection fora.
  4. The society would also have an executive committee headed by the Drugs Controller.

Terms of reference

The new watchdog will offer technical help to the State Drug Controllers and the NPPA to:

  • Monitor notified prices of medicines
  • Detect violation of the provisions of the DPCO
  • Look at price compliance
  • Collect test samples of medicines, and
  • Collect and compile market-based data of scheduled as well as non-scheduled formulations.

Why such move?

  1. Pharma companies have been accused of overcharging prices of drugs in the scheduled category fixed by the DPCO and those outside its ambit too.
  2. The suggestion to set up PMRUs was made against the backdrop of the lack of a field-level link between the NPPA and the State Drugs Controllers and State Drug Inspectors to monitor drug prices.
  3. The unit is expected to help the State Drugs Control wing, which is hit by severe staff shortage, and regulate drug prices more effectively.
  4. There is also a plan to collect data on the prices of surgical devices and stents in the market.

Expected Outcomes

  1. The NPPA had fixed the prices of around 1,000 drugs and the unit would track if buyers were being overcharged.
  2. It would also check if pharma companies were hiking the prices of non-scheduled drugs by more than 10% a year.
  3. It will check if there is any shortage of essential medicines.
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