Drugs for rare diseases, ones innovated in India to go out of price control

Soon drugs for rare diseases and those innovated in India will be out of the purview of price control. The Centre’s move is aimed at incentivising innovation and to ensure availability of medicines for rare disorders in the domestic pharma market. 

Around 17 per cent of the Rs 1.2-trillion domestic pharma market is currently under price control. 

The Department of Pharmaceuticals (under the Ministry of Chemicals and Fertilizers) has planned amendments to the Drug Price Control Order of 2013 to exclude innovations in India and drugs for rare diseases, said an official close to the development. 

A senior official from the department said that the gazette notification for this will be notified in a few days. “Excluding rare drugs from price control will ensure there is no shortage of these drugs in the market. We also want innovation in the sector,” he said.

At present, the ceiling prices of over 850 essential medicines (that come under the National List of Essential Medicines, or NLEM) are capped by the government. The ceiling prices of NLEM medicines are allowed to increase every year, in accordance with the wholesale price index. Medicines outside the NLEM are allowed an annual increase of around 10 per cent. 

In 2017-18, the Indian pharma market had clocked a 6.2 per cent year-on-year value growth to touch Rs 1.2 trillion. Of this, the non-NLEM category medicines had clocked 7.2 per cent growth, while the NLEM category growth was lower at 1.2 per cent. 

The drugmakers lobby has been asking the government to consider raising the ceiling prices of medicines (albeit temporarily) for those where input prices have gone up significantly. 

Meanwhile, the government has put a proposed pharma policy on the back burner. No decision has been taken on rationalising the trade margins for medical devices. 

The domestic devices industry has been asking the government to cap trade margins at 50 per cent for devices priced above Rs 1 lakh. For those above Rs 1 lakh but below Rs 1 lakh, a cap of 66 per cent; for devices below Rs 1,000, a margin up to 75 per cent.

Addressing the media in the Capital, Pharma Secretary Jai Priye Prakash said the government was working to categorise more devices as drugs. Once this is done, they can also be brought under price control. The government has already capped the prices of coronary stents and orthopaedic knee implants.

A total of 23 medical devices had been earlier notified as drugs and regulated under the Drugs and Cosmetics Act. Of these, only four devices - cardiac stents, drug-eluting stents, condoms, and intra-uterine devices - are included in the NLEM and are, therefore, subject to notified price caps.