Unbranded generics, ‘orphan drugs’ may go out of price control


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

From UPSC perspective, the following things are important:

Prelims level:  Drug (Prices Control) Order, 2013, Definition of Orphan Drug, Unbranded drugs, Rare Diseases

Mains level:  National Pharmaceutical Pricing Authority (NPPA)’s concerns over dilution of its power


Draft Pharma Policy, 2017

  1. It proposed changes by the department of pharmaceuticals (DoP) for conferring absolute powers to itself for:
  • creating the National List of Essential Medicines (NLEM) and deciding which drugs should be excluded from price control;
  • bringing all strengths and dosages of specified drugs under price control;
  • doing away with the “retail price” and having only the “ceiling price” for non-scheduled products, thereby expanding its span of control

Suggestions in the policy

  1. The policy suggests that NPPA be assisted for pricing by the advisory body with doctors, pharmacists, civil society representatives, industry representatives and government representatives as its members
  2. It suggests creating appellate against the decisions of NPPA with the higher judiciary
  3. However, NPPA sought it as dilution of its authority
  4. It argued that Drugs are not commodities, given statutory status to NPPA under the new affordable healthcare Act

What is NITI Aayog’s proposal?

  1. Along with restructuring NPPA, the Central government is considering giving itself powers to exempt ‘orphan drugs and unbranded generic drugs from price control
  2. Currently, Para 32 of the Drug (Prices Control) Order, 2013, gives the power to NPPA to exempt a certain class of drugs from price control
  3. The government is currently discussing a NITI Aayog proposal, to amend Para 32 to add orphan drugs, unbranded generic drugs and any other drugs decided by the proposed Standing Committee on Affordable Medicines and Health Products.
  4. This proposal is likely to be implemented whenever NPPA is restructured.

Objections by NPPA

  1. The Central government is likely to form a Standing Committee on Affordable Medicines and Health Products which will consist of its officials only
  2. This committee may be given the powers to exempt certain drugs from price control through amended DPCO who is privy to the discussions.
  3. The proposal to exempt “orphan drugs” from price control runs counter to the NPTRD submitted in the Delhi High Court in May 2017
  4. The policy itself was an outcome of orders passed by the Court in cases filed by patients struggling to access highly priced drugs
  5. As a result, the chief policy recommendation was setting up of a 100 crore corpus for funding treatment of rare genetic diseases between the center and states, which is still not functional.
  6. The NITI Aayog is proposing that these very same treatments may be exempted from price control, which undermines and endangers the purpose of affordable healthcare.


Drug Price Control Orders (DPCO)

  1. DPCO are issued by the DoP under Ministry of Chemicals and Fertilisers, in the exercise of the powers conferred under section 3 of the Essential Commodities Act, 1955.
  2. This enables the Government to declare a ceiling price for essential and life-saving medicines and ensure that these medicines are available at a reasonable price to the general public.
  3. The latest DPCO was issued in 2013.

What are Orphan drugs?

  1. The National Policy for Treatment of Rare Diseases (NPTRD), 2017 defines Orphan Drugs as the very expensive drugs used to treat rare diseases.
  2. As the number of persons suffering from rare diseases is very small, the pharmaceutical companies do not find it viable to develop and sell drugs for them. Therefore, these drugs are called ‘orphan drugs’.
  3. Pharma companies do so to recoup the cost of research and development.

What are Unbranded Generic drugs?

  1. The unbranded generic drugs may be exempted from price control because it is important to give an incentive to drug manufacturers to produce more and more unbranded generics.
  2. Unbranded generic drugs are comparatively cheaper than branded ones.
  3. Currently, most of the drugs sold in India are branded generic drugs.
  4. When Paracetamol is sold under the brand name ‘Calpol’ or ‘Crocin’, it is called a branded generic drug. But when it is sold as ‘paracetamol’ itself, it is called an unbranded generic drug.

What are Rare Diseases?

  1. India does not have a definition of rare disease. However, World Health Organization (WHO) defines rare disease as often debilitating lifelong disease or disorder condition with a prevalence of 1 or less, per 1,000 population.
  2. Some common rare diseases are Haemophilia, Pompe disease, Thalassemia, Sickle-cell Anaemia and Gaucher’s disease
  3. India has recorded 450 of such rare diseases, according to the NPTRD 2017
Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.
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