Centre to set up State-level units to monitor drug prices

To keep a close watch on pricing of medicines, the Centre is looking at setting up price monitoring and resource units (PMRUs) at the State and Union Territory levels.

According to a draft Central scheme, which has been made public by the National Pharmaceutical Pricing Authority (NPPA), these units would be established at a cost of over ₹96 crore over a period of five years, starting with the 2015-16 financial year.

A senior official said the NPPA has found several manufacturers to be errant and overcharging medicines. “The NPPA has found thousands of cases of overcharging by manufacturers that entail recovery of over ₹4,000 crore. But many of these get stuck in legal cases and the NPPA has been able to recover less than 10 per cent of these dues. We need a better system for monitoring and preventing such cases,” the official said.

“The Scheme is proposed to be implemented during the 12th Five-Year Plan period and commencing from the financial year 2015-16 onwards,” the draft says, adding that in the 2015-16 fiscal, ₹20.73 crore would be released for the scheme.

The pricing authority is responsible for fixing prices of scheduled drugs as well as for new drugs, besides revising these prices regularly as well as monitoring the enforcement of such notified prices. The draft scheme notes that the NPPA lacks field units to develop necessary linkages with State Drug Controllers and State Drug Inspectors, which are needed for effective monitoring.

“There is an urgent need for setting up PMRUs at the States/UTs which would render technical assistance to the State Drug Controllers and NPPA towards monitoring the notified prices of medicines, price movement of scheduled and non-scheduled formulations, detection of violation of the provisions of DPCO (Drug Prices Control Order), pricing compliance; collection and compilation of market based data, collecting test samples of medicines; conducting training, seminars and workshops for consumer awareness, availability of scheduled and non-scheduled medicines at reasonable prices,” the draft notes.

“In the first year, 90 per cent of the non-recurring expenses and six months advance for recurring expenses would be released as first instalment to those States/ UTs that desire to set up the PMRUs,” the draft says. It is estimated that that the total one-time expense (non-recurring) would stand at about ₹1.7 crore, while the recurring annual expenses are likely to stand at ₹19 crore.