Delay In Setting Up Of Price Authority Riles Drug Industry

The pharmaceutical industry is concerned over the delay in constituting the National Pharmaceutical Pricing Authority (NPPA).

The government has kept in abeyance many pricing decisions, especially those related to deregulation of the prices of certain items, on the ground that NPPA would be constituted soon and would address the issues.

In September last year, the government announced that Kamal Pande, a senior Indian Administrative Service officer would be the chairman of the five-member NPPA, but the authority has yet to be constituted fully.

A decision on nominating the other four members is yet to be taken. One or two of the other members are expected to be industry experts and the rest bureaucrats.

 

Officials in the ministry of chemicals & fertilisers said the NPPA secretariat was being constituted and its location had been finalised. However, it would take three to four months for the pricing body to start functioning, they said.

The NPPA is to be an autonomous body within the ministry of chemicals & fertilisers. It will fix prices as well as act as an appellate authority.

It will take over the drug pricing function, which is now vested with the government under the 1995 drug price control order (DPCO).

A provision of Rs 70 crore had been made in the 1996-97 budget to finance the setting up of the NPPA secretariat.

According to the original schedule, the secretariat was to start functioning by November-December 1996.

The NPPA will fix prices of controlled drugs, review pricing decisions, and decide on formulations meant to be under control. Its broad focus will be to oversee the provisions of the DPCO.

The drug industry is eagerly awaiting the setting up of NPPA as it has a long list of complaints over the drug pricing mechanism now enforced by the ministry of chemicals & fertilisers. The industrys biggest complaint is that the criteria for price control is not clearly defined. Similar formulations made by different companies can be found on either sides of the price control fence. The government relies on data provided by the Bureau of Industrial Costs & Pricing. This data, the industry alleges, is often outdated.