GoM pulls up drug pricing body for presenting inaccurate data

GoM pulls up drug pricing body for presenting inaccurate data
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First Published: Mon, May 12 2008. 06 36 AM IST

Updated: Tue, May 13 2008. 11 53 AM IST
New Delhi: A group of ministers, or GoM, tasked with finalizing India’s pharmaceuticals policy has sharply criticized the country’s drug prices regulator for providing inaccurate information at its meeting last Wednesday.
Officials of the chemicals and fertilizers ministry are, however, brushing it away as mere “clarifications” sought from the regulator.
In the meeting on 30 April, agriculture minister Sharad Pawar, who heads the GoM, questioned the National Pharmaceutical Pricing Authority, or NPPA, about the drug prices it quoted in the group’s last meeting in January, the minutes of the meeting show.
Another minister, who is part of the group, supported his view, saying NPPA only gave prices of medicines made by global drug makers and not of the cheaper alternatives made by Indian firms.
Expressing concerns: Union agriculture minister Sharad Pawar. As head of the group of ministers, Pawar has questioned NPPA about the drug prices it quoted at the previous meeting in January. (Photo: Kamal Singh/PTI)
Another minister, who is part of the group, supported his view, saying NPPA only gave prices of medicines made by global drug makers and not of the cheaper alternatives made by Indian firms.
Multinational pharma companies are known for charging higher prices. Picking their products exclusively for a survey, or in unduly high numbers, is bound to create a so-called selection bias that would inflate drug price statistics.
NPPA chairman Ashok Kumar declined to comment on the matter.
According to two people with knowledge of what happened in the meeting, including one who was present in it, minister for science and technology Kapil Sibal said the data that NPPA presented was for products made by multinational drug makers that commanded market shares of no more than 10% in their respective segments.
Alternative home-grown products that have about 90% share of the market and are available at two-thirds or one-third the prices quoted by NPPA were not mentioned by the regulator, he said.
Sibal, contacted by Mint to confirm the objections against NPPA, said these were “internal matters” and that he was “not going to comment on them either way”.
NPPA chairman Kumar clarified at the meeting that the examples of high prices of non-scheduled medicines—whose prices are not capped by the regulator—were meant to illustrate how these firm charge exorbitantly at the entry stage, explained a senior official in the ministry of chemicals and fertilizers, who requested anonymity.
A new drug launched by a global drug maker is typically sold at very high prices, and it takes a few years for competition from generic drug makers to catch up and lower it, the official pointed out.
The 30 April meeting had ended inconclusively after the health ministry complained that there were clauses in the new pharma policy that created an overlap between its areas of functioning and that of the ministry of chemicals and fertilizers, as reported in Mint on 1 May.
These functions include the proposed policy’s provisions on buying drugs, health insurance, cancer assistance fund and other schemes for poor families. The GoM has directed the secretaries of the two ministries to sort out the potential overlaps.
The Indian drug industry, with revenues of some Rs70,000 crore, is pitched against the ministry of chemicals and fertilizers—India’s policymaking body for the sector—over the method of imposing price control on 354 so-called essential medicines.
The ministry wants to fix price caps based on input costs while the drug makers prefer a liberal price monitoring regime.
The confrontation has intensified with NPPA initiatinga spate of measures to tighten controls, combing the market finely for violations andcoming down heavily on defaulters.
The regulator has halved the permissible level of price hikes in a year to 10%, brought two dozen new drugs under price control on grounds of public interest, and had till 15 February imposed penalties totalling Rs1,546.28 crore from the industry for overpricing medicines.
However, with companies challenging the regulator’s orders in various law courts, it is still to recover more than Rs1,441 crore.
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First Published: Mon, May 12 2008. 06 36 AM IST