The Cabinet is likely to take up the proposed National Pharmaceutical Pricing Policy for approval on Thursday, government sources said. The proposed policy is aimed at capping prices of 348 essential medicines at the weighted average of all the drugs, in a particular segment, with more than 1% market share.
If the Cabinet clears the proposed policy today, then DoP would also have to notify the same before the Supreme Court’s next hearing on November 27.
Once the proposed policy comes in place, prices of various expensive drugs would reduce, whereas it is also likely that some of the low-priced drugs will become expensive due to the new pricing mechanism.
According to a source, the proposal is listed in the Cabinet agenda and is expected to be considered for approval. A minister, privy to developments, also confirmed the same.
The move is expedited because of a ongoing case in the SC, which asked the government last month to fast track the policy or else it will pass an interim order. Following that, the government told the apex court that it will try to notify the policy by end of November, provided it receives a Cabinet nod. The Department of Pharma (DoP), which is the administrative ministry for pharmaceuticals, also committed to the Court that it will submit a Cabinet Note to the Cabinet Secretariat by October 15.
Last month the Cabinet Secretariat asked the government to seek some additional clarity from the ministry of law and finance related to the observation made by Supreme Court during one of its previous hearings in a case related to the formulation of the policy. There were concerns that the proposed policy, based on recommendations of Group of Ministers headed by Agriculture Minister Sharad Pawar, which is presented for Cabinet consideration may trigger adverse reaction from the apex court. Reason being the SC, during a hearing on October 3, had said, “The government should not alter the price structure of the drugs”.
However, the Additional Solicitor General Siddharth Luthra opined that there is no legal hurdle in the Cabinet taking up the recommendations of the GoM. Even if the policy did not conform with observations made by the SC in a previous order, it should not lead to any adverse consequence because framing of policy is a government prerogative, he said.
As per the recommendations of the GoM, prices of all the regulated medicines will be revised annually based on the Wholesale Price Index with a cap on the maximum limit.
Currently, the government caps prices of 74 bulk drugs and all medicine formulations containing one or more of these bulk drugs. For all other drugs, pharmaceutical companies are allowed to raise prices by up to 10% annually and for any increase beyond that they have to seek an approval from the pricing regulator National Pharmaceutical Pricing Authority.