The Hindu Business Line : ‘NPPA price fixing is indirect way of control’

New Delhi, Aug. 2 The pharmaceutical industry is smarting from the National Pharmaceutical Pricing Authority’s recent move fixing the prices of about 20 non-scheduled drugs in two instalments.

The industry claims the move is an indirect route to gain control on drug prices, even while the Pharma Policy, which proposes to expand the coverage of drugs, is still being considered by a Group of Ministers.

However, the NPPA feels that the industry’s demand translates into a 72.8 per cent increase over a three-year period, which is far too high. It also points out that the industry has been reluctant to share information or respond promptly to price queries.

According to a senior official of a leading pharmaceutical company, by the time the regulatory authority compiles its data and notifies a company the violation is old and so is the penalty. The industry would like the Government to take into consideration the price rates it has maintained in the years following the violation.

price increase

It also argues that the average price increase is only between 3-4 per cent and that markets and competition would not allow it to increase prices by 20 per cent every year.

Non-schedule formulations from companies such as Ranbaxy, GlaxoSmithKline, UCB, Dr Reddy’s Labs, Lupin Labs and Cadila were amongst those whose prices have been fixed by the NPPA on Wednesday. The rates of these 11 drugs have seen an increase of more than 20 per cent during a 12-month period. These are the second set of drugs to be virtually brought under price control.

The Government has, this year, lowered the 20 per cent cap on price increase to 10 per cent.

However, the current cases are those that have been returned to the NPPA from the Ministry, since the former was empowered again to fix prices of non-scheduled drugs under Para 10 (B) of the DPCO 1995.

The Authority is hopeful of clearing all such cases in a month’s time, before it turns its focus to cases that will come under the new norms.