Compliance rule objections delay new Drugs Prices Control Order

Discussion continues on the rules meant to enforce the new Drugs Prices Control Order (DPCO), with objections from the pharmaceutical industry delaying its notification.

The government wants to make it mandatory for pharma companies to comply with the prices of medicines within 15 days of issuing the notification. However, the industry says it is not possible to recall drugs from the market at such short notice.

And, since prices will be revised annually, the same process is expected to be followed every year, say the companies.

"Once a drug reaches the distribution and retail level, withdrawing it becomes a complicated process. Besides, all the relabelling, etc, has to be done by the manufacturing company. So, 15 days is not feasible," said a pharma company official.

An official in the know said if pricing orders weren't immediately implemented, the government felt it would encourage hoarding. "The department of pharmaceuticals is trying to work out some solution to address the problem," he said.

The new DPCO is expected to be notified by the end of this month. "Most of the provisions are finalised. Once there is clarity on the time frame, the Department will start seeking approvals from several ministries, including law," the official said.

DPCO will determine the retail price of about 640 packs of essential medicines, setting them in line with the new pricing policy.

According to the policy, the prices of 348 essential drug formulations (or 640 packs of medicines containing these drugs in various strengths and dosages) will be fixed at the arithmetic average of prices of all the drugs in that segment with a minimum of one per cent market share. The order will also define the mechanism and other rules for price fixation of medicines by the National Pharmaceutical Pricing Authority (NPPA).

Although the new policy was notified by the government in early December, it has not been implemented because the detailed formula, rules and provisions of the policy will be laid out in the revised DPCO. NPPA currently works under the provisions of DPCO of 1995.