Centre forms committee to oversee drug pricing reforms

New Delhi: The government has decided to constitute a five-member committee to oversee reforms efforts for the pricing of drugs and medical devices, according to the department of pharmaceuticals.

The primary task of the committee will be to strike a balance between pricing and availability of essential medicines, while offering incentives to the industry to foster growth and exports. Its is expected to submit its report to the Union ministry of chemicals and fertilizers within three months, according to the notification, issued on 12 March

The panel will comprise three key members: the Secretary of the Department of Pharmaceuticals, the Chairman of the National Pharmaceutical Pricing Authority (NPPA), and the Senior Economic Adviser to the Department of Pharmaceuticals. Additionally, it will have two representatives from the pharma industry: the Secretary of the Indian Pharmaceutical Alliance and the Chief Executive of the Indian Drugs Manufacturers' Association.

Additionally, the committee will address several other tasks, including instituting reforms within the NPPA, establishing a framework for price moderation for medical devices, providing incentives to reduce imports, and developing a price moderation framework for emerging and precision therapies to ensure timely access for patients in need.

The committee will also supervise the drafting of a new Drugs and Medical Devices (Control) Order, taking into account these objectives, which would benefit the industry.

"The Centre wants to bring down the prices of drugs. It is almost a decade that the government had come out with a drug reforms order. So, it is the right time to make reforms in the rules, and this is a good step by the DoP. The pharma industry members are just invitees to the committee, so the final decision will rest with the government," said a member of the pharma association, seeking anonymity.

Currently, the NPPA follows the regulations outlined in the Drugs (Prices Control) Order, 2013 (DPCO-2013) to ascertain the prices of medications and medical equipment categorized as drugs. The NPPA in 2012 had replaced the "cost-based" pricing of the Drug Policy of 1994 with "market-based" pricing, which led to implementing the DPCO-13.

Medical device associations have been advocating for a distinct policy governing the manufacturing and sale of products.

The NPPA sets the ceiling price for all scheduled formulations listed in the National List of Essential Medicines (NLEM). 

Additionally, NPPA monitors the prices of non-scheduled medications to ensure that any increase in the maximum retail price (MRP) does not exceed 10% of the average price of the previous 12-month period.