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The National Pharmaceutical Pricing Authority’s (NPPA’s) move to ease the approval process for new drugs will increase competition and benefit customers. The domestic pharmaceutical market is valued at over Rs 1 lakh crore and between April-November, sales growth has been a modest 4.6 per cent, owing to goods and services tax implementation-related issues. The change in norms — which comes in the backdrop of a six-month tussle between the industry and the regulator — is also expected to aid growth. “Growth has been impacted as the NPPA was not giving product approvals. The easing of norms should improve growth and benefit customers, as increased competition will help keep prices in control,” said D G Shah, secretary general of Indian Pharmaceutical Alliance that represents top 20 drug makers in the country. “It is a positive move and will help in ease of doing business,” said Deepnath Roy Chowdhury, president of Indian Drug Manufacturers’ Association (IDMA). Cipla declined to comment, while other firms did not respond to queries on the issue. “The NPPA was sitting on applications and was not clearing them for the past eight to 10 months. Then, there was a review meeting at the PMO. Now, they have finally budged. This is very good news for the industry,” said the chairman of a leading pharmaceutical company in India. Shah said more than 100 product applications of member companies were pending with the NPPA for the past few months and the total number of such applications is estimated to be double of that. In an office memorandum issued on Tuesday, the NPPA said that price approval of new drugs shall not be linked to the Integrated Pharmaceutical Database Management System (IPDMS) or any other conditionality. In 2014, the regulator had asked the manufacturers to register themselves with the IPDMS, requiring them to submit data on pricing and sales to it on a regular basis. Sources say that most major companies had fully complied with the norms on sharing data, and yet their products were not approved. Another issue between the industry and the regulator was that of launch of products without prior approvals. The industry denied that charge.
Under the law, the NPPA fixes prices of drugs included in the National List of Essential Medicines (NLEM). In the case of NLEM medicines, price is fixed for a drug of a particular dosage.Existing manufacturers of that essential drug (where price is fixed) require price approvals from the regulator for introducing the same drug in higher dosage. Price approval is also required in case a combination product is introduced in which one of the constituent is an essential drug. The NPPA had linked price approvals for such new products to various conditions and this had become a bone of contention between the regulator and the industry. Sources said in some cases there was a difference in interpretation between the two sides. “The firms launched products believing they need not require prior price approvals. But the NPPA differed and began issuing notices to them. While Metformin 500 mg is in the NLEM list since 2011 and its price is fixed, Metformin-sustained release version was not a part of the NLEM till March 2016, and as such firms thought they do not require prior approval to launch combination product with the sustained release version,” a source said. Viranchi Shah, chairman, IDMA, Gujarat State Board, and the owner of a mid-sized pharma firm in Ahmedabad, said that earlier there was a provision that whenever one applied (a company has to apply for price approval before launching a product which contained at least one molecule listed in the NLEM) to the NPPA and there was no response within 120-days, the product would be deemed approved. “Later, this provision was removed. This led to a lot of applications getting piled up at the NPPA. Today’s move is welcome, it is a very positive step. This would enable launch of new products faster.”