Draft pharma policy seeks to bridle NPPA’s pricing powers

18 Aug 2017


The draft pharma policy prepared by the government proposes the setting up of an advisory body to assist the National Pharmaceutical Pricing Authority (NPPA) in fixing prices, a move that would take away the drug pricing authority's powers to fix prices.

The draft pharmaceutical policy, prepared by the department of pharmaceuticals under the ministry of chemicals and fertilizers, proposes that an advisory body also comprising representatives of the industry nominated by the government to assist the NPPA in fixing prices.

The new pharma sector policy also seeks to end the anomaly of a divergent regulatory system where the Central Drugs Standard Control Organisation, a regulatory body for pharmaceuticals and medical devices, functions under the health ministry, while the NPPA comes under the fertilizer and chemicals ministry's department of pharmaceuticals.

''For ensuring accessibility and affordability of drugs, ease of doing business and more coordinated synergies all the regulators / commissions pertaining to pharmaceutical industries  / sector will be brought within the ambit of one department,'' the draft policy said.

Drug prices once fixed by the NPPA cannot be revised unless directed by the government or by courts, as per the draft policy.

''The government will prepare the list of medicines for price regulation and transmit them to the NPPA for fixing the price ceilings. The regulator and the government would be two distinct agencies,'' a Mint report quoted the draft policy as stating.

In essence, the new policy seeks to shift drug price monitoring and fixing powers to the government and give the NPPA the job of price calculation, without any power to decide on it.

The draft, which focuses heavily on pricing of medicines, proposes to give more powers to the government over the operations of the National Pharmaceutical Pricing Authority (NPPA), which till now functions as an autonomous body.

Also, NPPA will not be allowed to review prices of drugs once fixed and the authority will not also be able to cap the prices of in-patent medicines. It will also be able to use its ''emergency powers'' under government orders.

''This Policy would significantly contribute to the `Ease of Doing Business' in the pharmaceutical sector… The 'Make-in-India' programme would also get an impetus by the actions,'' the draft policy says.

The NPPA's powers to lay down price ceilings will be limited to selected medicines, it added.

The decision to revise government's pharma policy follows protests by the pharma lobby, especially MNCs that indirectly controls the country's healthcare sector.

NPPA's recent decisions to cap prices of cardiac stents and knee implants have come as a big blow to the industry, which has been enjoying unbridled powers to fix prices and decide the course of healthcare industry as well.

The policy proposed that trade margins will be prescribed to ''create a level playing field for the industry and to bring down the prices''.

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