Fresh drug pricing order soon

Aims to increase the span of direct price control from 74 bulk drugs to 348 essential medicines

The National Pharmaceutical Pricing Authority (NPPA), which regulates drug prices, is scheduled to meet early next week to vet new price notifications for a little more than 200 essential drugs, an official said

“The Authority will meet early next week and discuss all the notifications that are to be issued. Once the price orders are vetted and approved during the meeting, we will notify them,” said the official, in know of the developments.

According to the official, the prices are calculated primarily based on data from IMS Health. In some cases, the Authority has also referred to data from All India Organisation of Chemists and Druggist (AIOCD).

However, initially the new price orders will be notified only for 200-250 medicines of a total of 348. This is because the NPPA is yet to verify data for the rest of the medicines.

“In some cases, there is not enough data because companies sell medicines directly. We also have some confusions in some cases and need to verify it with the department. So, that may take another 10-15 days,” the official said.

Companies will get 45 days from the date of notification to flush out existing stocks of such products from the market and introduce the new lot as per the new price order. In case a company is found selling medicines with old price tags, the NPPA will take action against that firm for overcharging consumers, the official said.

In the new pharmaceutical pricing policy, notified by the government in December last year, prices of 348 essential medicines will be capped at the arithmetic average of all such drugs in a particular segment with more than one per cent market share. This is a market-based mechanism in contrast to the earlier price fixation method based on cost plus profit formula, where the regulator would fix the price of regulated medicines based on their cost of production along with a profit margin. With the new price regime in place, while prices of some drugs are expected to move up, those that are highly expensive may also drop with competition.

The official said the first lot of pricing orders, which is expected anytime this month, would cover a large range of therapeutic segment including insulin, cardiovascular drugs, antibiotics and multivitamins. While some of the oncology related and anti-retrovirals will be covered in the first phase, other are also expected to follow soon.