NITI Aayog may revamp process of drug selection for price control

New Delhi: Government think tank NITI Aayog is working to revamp the existing system of identifying medicines for price control, two persons aware of the matter said.

The Prime Minister’s Office (PMO) asked NITI Aayog to intervene after pharma lobby groups expressed their dissatisfaction over the proposed pharmaceuticals policy, the people cited above said on condition of anonymity. These groups also showed their concern over the way National Pharmaceutical Pricing Authority (NPPA) currently fixes price caps.

“The PMO has asked Niti Aayog to prepare a road map and submit a report to the PMO based on their consultations with the pharma lobby groups and pharma experts,” said one of the persons cited above on condition of anonymity.

Currently, the health ministry prepares the list of drugs eligible for price regulation. The department of pharmaceuticals (DoP) then incorporates the National List of Essential Medicines (NLEM) into Schedule 1 of the Drugs (Prices Control) Order (DPCO). Following this, the NPPA fixes the prices of drugs in this schedule. Medicines and devices listed in the NLEM must be sold at the price fixed by NPPA, while those in the non-scheduled list are allowed a maximum annual price hike of 10%. Over 750 formulations are currently in India’s list of essential medicines.

While NPPA governs price control, DPCO is the order by which price control is enforced. DPCOs are issued under the Essential Commodities Act, 1955. The NLEM issued by the health ministry forms the basis of deciding which medicines should come under price control.

On 2 January, NITI Aayog officials had their first meeting with pharma sector experts, who were asked to share their views on NLEM, whether it should be linked to DPCO, which drugs they think should come under price control, whether there is any need to amend the DPCO, how they think price caps should be determined and whether they agree with the current method.

The next round of meeting with pharma lobby groups such as Indian Pharmaceutical Alliance (IPA), Indian Drugs Manufacturers’ Association (IDMA), and officials from pharma companies is slated scheduled for 9 January. NITI Aayog had earlier sent a three-page questionnaire to the lobby groups, which will form the basis of the meeting. The pharma lobby was asked to propose changes in the manner the government identifies medicines that should be brought under price control and what they feel is the best approach to have timely additions and deletions in NLEM. The companies were also asked to share their views about the maximum allowable trade margins on ex-factory price.

“Price control has been an area of concern not only for the pharmaceutical industry but also for the NPPA, which is the price governing body. Various efforts have been made to get the correct balance between the interests of the consumers and pharmaceutical industry, but to no avail. Niti Aayog has been told to bridge that balance and look at the concerns of both consumers and pharma lobby groups,” said the second of the persons earlier mentioned aware of the matter.