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| Govt moves to tighten drug price control |
| Joe C Mathew / New Delhi Jun 14, 2010, 00:52 IST |
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Panel working on coordination between marketing and pricing bodies.
The central government is planning to set up a system where the drug licensing and drug pricing authorities will work in coordination to ensure a watch is kept on the price and composition of each drug sold in the country.
The idea is to ensure ‘functional linkage’ between the office of the Drugs Controller General of India (DCGI) and the National Pharmaceutical Pricing Authority (NPPA). The former approves marketing of a drug and the latter is supposed to enforce price control laws. The parent ministries are different — DCGI comes under the health ministry, while NPPA is under the chemicals and fertilisers ministry.
The aim, senior government officials said, was to address the current problem of NPPA having no idea about a drug’s costs and prices for several months after its sale had been approved by DCGI.
The domestic pharmaceuticals market — both government supplies and prescription-based sales — is estimated to be about Rs 50,000 crore a year. The prices of a fifth of the medicines are set by the government. For the others, the manufacturers are not allowed to raise prices by more than 10 per cent of the stated maximum retail price in a year.
Critics, who insist the regime is too weak, want price control to come in at the time of introduction of a new drug. They say the introductory price of several medicines is extremely high, compared to existing products. Besides, they say, if a medicine comes under price control, the company adds another ingredient and takes licensing approval to market it as a new product.
Ministerial panel
Government officials say the idea is to develop a system where DCGI will inform NPPA about the manufacturing approval of any new drug. An inter-ministerial coordination committee had been recently set up to recommend on better coordination to ensure availability of drugs at affordable prices.
Senior officials said the panel had its first meeting in March. It constituted two groups, one to examine pricing issues and the other to go into those of quality. The one on pricing is headed by the NPPA chairman; the other one by that of DCGI. The two are to give their reports and the DCGI-NPPA linkage is expected to be part of the recommendations.
The number of new drugs approved by DCGI is high, as Indian laws categorises a new combination of existing medicines as a new drug, needing DCGI’s marketing permission. Thus, DCGI gave marketing approval for 87 medicines between January and April this year. It had given 215 such approvals in 2009 and 264 marketing permissions in 2008.
And, NPPA says overpricing of medicines is a major issue. Since its inception a dozen years earlier, it had issued demand notices in 740 cases, for a total amount of Rs 2,147 crore, as of March. Of this, Rs 191.4 crore had been realised till end-February and the bulk of the balance amount is under litigation.
“This (government move) is long overdue. However, the devil is in the details. One needs to see how it is being done,” said Chinu Srinivasan of Low Cost Standard Therapeutics, a cooperative initiative that produces affordable medicines.
He said the domestic drug market is overpriced by three to four times, on average. The move appears to have been triggered by various letters written by Abani Roy, a Rajya Sabha member from a Left party, the RSP, to Union health minister Ghulam Nabi Azad. He had complained of huge price differences between different brands of the same medicine, as an indication of high profit margins enjoyed by drug companies in the name of quality.
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