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Chemicals and fertilizers minister Ananth Kumar. Photo: Hindustan Times
Chemicals and fertilizers minister Ananth Kumar. Photo: Hindustan Times

Govt to amend norms for fixing drug prices

Govt to enable National Pharmaceutical Pricing Authority to regulate prices of around 350 drugs for which market data is not available

Ananth Kumar, minister for chemicals and fertilizers, promised to amend the Drug Price Control Order (DPCO) in the next 15 days, enabling the National Pharmaceutical Pricing Authority, or NPPA, to regulate the prices of around 350 drugs for which market data is not available.

The minister was speaking at the foundation day celebrations of NPPA.

The government could determine the price ceiling in two ways.

“It could be determined through cost-based pricing, which would factor in the manufacturing costs, or through minimum institutional prices, which may also be an average across multiple institutions or even states," a person familiar with the developments said on condition of anonymity.

Pharma companies, however, are not in favour of cost-based pricing, an official in the department of pharmaceuticals said, asking not to be identified.

“We are hoping to regulate the price of these drugs based on minimum institutional prices which could even be derived from across multiple states, if there’s a need felt," the first person said.

That may not be fair to the pharma companies, an expert said.

“The lowest cost price method, if used to determine the price ceiling of drugs, would be unfair. Our system still does not assure us that every drug manufactured and marketed conforms equally to all regulatory norms. Access to patients should not come at the cost of patient safety. A less safety-conscious manufacturer may be able to price drugs lower but that is no guarantee of the drug’s safety and efficacy. The government should also factor in the pharmaceutical company’s concerns as well so that it’s truly reflective of stakeholders broadly," said Muralidharan Nair, partner-life sciences, EY India.

NPPA governs price control and DPCO is the order by which price control is enforced. DPCOs are issued by the chemicals and fertilizers ministry and issued under the Essential Commodities Act, 1955, through which certain medicines could be declared as essential commodities and their prices capped.

The National List of Essential Medicines, issued by the ministry of health and family welfare, forms the basis of deciding which medicines should come under price control via DPCO.

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