The prices of medicines will soon bend in the service to the government’s ‘ease of doing business’ and ‘Make in India’ programmes, if the proposals in the Draft Pharmaceutical Policy, 2017 are accepted.
The Draft Policy, which BusinessLine has seen, calls for ‘re-orientation’ of the Drug Price Control Order (DPCO) from “price-control to monitoring of drug prices”.
The Draft, which focuses heavily on prices of medicine, has proposed massive dilutions in the existing framework, which would give more control to the government over the operations of the National Pharmaceutical Pricing Authority (NPPA), which till now functions as an autonomous body.
It also attempts to strip the NPPA of some powers, for instance, once the price for a drug is fixed the pricing authority would not be allowed to revise them. The NPPA would also lose its power to cap the prices of in-patent medicines, and would be able to use its “emergency powers” only on the government’s orders.
“This Policy would significantly contribute to the Ease of Doing Business in the pharmaceutical sector… The ‘Make-in-India’ programme would also get an impetus by the actions,” the draft policy says.
The Authority is set to lose its autonomy with increase in interference from the government. While the policy says, “The regulator and the government would be two distinct agencies. The government shall not be the regulator and the regulator shall not be the government,” yet a government-appointed advisory body, with representation from the government, industry, as well as civil society, is being proposed.
The NPPA brought down the prices of life-saving cardiac stent down by over 80 per cent in some instances and on Wednesday capped the prices of knee implants by nearly 69 per cent (for some types), besides several other medicines.
The industry is also wary of the proposed changes in the law. DG Shah, Secretary General of the Indian Pharmaceutical Alliance said, “This could, possibly, be one of the most difficult policies for the industry. It would push up costs and reduce margins and increase pressure on pricing.”
He said that while the draft policy appears to be envisaging a much wider span of control, some of the steps such as eliminating third-party manufacturing and loan licencing would hit the industry as well as the availability of medicines. “What is the extent of loan licencing in the country and what will be the impact? Preliminary calculations show that one-third of the industry is under loan licencing. If it is phased out how many people would lose employment and how would you ensure availability of these medicines?”
On the issue of restricting price control only to off-patent medicines, Shah said, “ Only multinationals hold patents, which would not be under price control. While the rest of the market, which produce cheap medicines would be under price control. It says DPCO would look at monitoring prices instead of capping. What does that mean? The policy has not been thought through.”
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