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Ambarish Mukherjee

NPPA to get suo motu powers to monitor drugs outside price control

New Delhi , Sept. 6

The proposed new pharma policy has taken steps to plug some loopholes that could be utilised to keep drugs out of price control.

According to official sources, the policy proposes to provide suo motu powers to the National Pharmaceuticals Pricing Authority (NPPA), which would be the regulator for the industry, to bring under price control new doses of medicines that are not covered under the existing National List of Essential Medicines (NLEM).

The policy proposes to put the 354 essential drugs under control, a move stiffly opposed by the drug manufacturers. These drugs are sold in various standard sizes and add up to 663 medicines (for example, paracetamol 250 mg and paracetamol 500 mg tablets are counted as two medicines).

Under the price control regime, the regulator will enjoy powers to monitor production and marketing, and could also set the price at a particular level.

However, the policy also provides an avenue for pharmaceutical companies to keep their drugs outside NPPA's control. Out of the 663 medicines in the list, 124 that are available at less than/up to Rs 3 per tablet/dose would be kept out of price control, sources explained. But in order to keep flexibility and to adjust to the changing industrial practices and systems, a provision has been included to empower the NPPA with suo motu powers to also check prices of those drugs not under price control, sources said.

This is to prevent companies from changing the strength of a particular drug just to escape price control.

For instance, if a particular drug with 500-mg strength is currently available at Rs 6 per tablet, companies would not be allowed to change the strength to 250 mg and price the tablet at Rs 3.

The NLEM has also listed such drugs with their specific strengths/doses and forms. The proposed policy includes a clause saying, "There may be a possibility that manufacturers may decide to switch over to the strengths/doses forms which are not covered under price control. In order to avoid this type of unfair trade practice that may impinge on the availability of the essential medicines, the NPPA shall fix the prices of all such formulations suo motu presuming that they are in price control. Such price fixation will be resorted to cover the situation where a company discontinues the production of the specific NLEM drugs and shifts to another strength or dose form of the same drug."

Sources said that the benchmark price of Rs 3 was initially suggested by the Ministry of Health and eventually agreed to by the Ministry of Chemicals and Petrochemicals as well as the industry.

Sources said that the draft would be finalised only after the new 14-member committee set up last month gives its views for which the date has been fixed at September 30.

After the committee gives its views, the Ministry will revise the existing draft. The committee has been asked to give its views on five issues — namely, public-private partnership for BPL families, whether price rise could be contained through competition, R&D, concessional pricing for Government procurement and whether monitoring can replace cost-based price control. The policy could be expected to go to the Cabinet by end of October-end, sources said.

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More Stories on : Regulatory Bodies & Rulings | Pharmaceuticals | Policy

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