Monday, 23 May 2016

CivilsDially:: Drug Pricing Policy and Essential Medicines

In 2015, The Supreme Court’s described India’s drug pricing policy as irrational and unreasonable. There are many issues with drug pricing of essential medicines. To some extent, there is a debate over control on prices of essential medicines vs. industry interest.


Let’s take some back2basic concepts related to the issue

What is Drug Price Control?

Basically, it is a mechanism to regulate the prices of drugs, especially of essential medicines. The Centre issued Drugs (Price Control) Order, 2013 to regulate the prices of drugs. It initially brought under price control 652 medicines or formulations based on 348 bulk drugs listed under the National List of Essential Medicines (NLEM).

Drugs (Price Control) Order, 2013

The Drug Price Control Order, 2013 expanded the scope of regulation to 60% of the $22-billion Indian pharmaceutical market. The new DPCO, which replaced the 1995 version ( 1995 version covered 74 bulk drugs and their formulations) increased the span of controls more than threefold.
Under the existing DPCO, price ceilings for 348 NLEM drugs are set using the ‘market-based’ mechanism. While price increases of NLEM drugs are restricted to be in line with or below the wholesale price index, the non-NLEM products are allowed a maximum price increase of 10% in any one-year period.

National Pharmaceutical Pricing Authority

National Pharmaceutical Pricing Authority is an organization under Union govt, responsible to fix/ revise the prices of controlled bulk drugs and formulations.<Bulk Drugs are ingredient in a pharmaceutical drug that is biologically active and it is also the central ingredient>
It also enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

What are Essential Medicines?

Essential medicines are those that satisfy the priority health care needs of the country’s population. They are generally based on the country’s disease burden, priority health concerns, affordability concerns etc.

What is India’s Policy on Essential Medicines?

In India, National List of Essential Medicines decides the essential medicines. It is a dynamic list and is reviewed every 3 years to include or exclude drugs as relevant to the newest medical innovations and aligned to market competition.

How are the prices of essential medicines decided?

The ceiling price of essential medicines has been fixed based on theweighted average of the prices (MRP) of all brands of that drug that have a market share of at least 1%. If any medicine is priced lower than the ceiling fixed by the regulator, then companies selling such drugs should maintain the existing or lower retail price.

What are the demands of Industry?

Industry is seeking a 5-year exemption from drug price control as these ‘ad hoc’ measures will hinder the growth of the pharma sector. The exemption will incentivise investments in the sector, because industry is trying to invest in expansions, scale up and creating global scale.

Future

There is a need to overhaul India’s intellectual property rights regime. The soon-to-be-announced National Intellectual Property Rights Policy will, hopefully, have a positive impact here.
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Key News and Op-eds::

Drug makers body says govt’s ban ‘arbitrary and unfair'

  1. Context: Govt.’s decision to ban 344 fixed dose combination medicines, including few cough syrups
  2. News: Indian drug manufacturers’ association said that there was no proper discussion with the industry before the ban
  3. Criticism: The amount of time, money and environmental impact in destroying these procedures will be huge

As customs duty exemption goes, 76 life-saving drugs to get costlier

  1. The Finance Ministry has withdrawn exemption of 76 medicines from customs duties
  2. Why – To boost domestic competition among Indian drug-makers
  3. Impact – It could inflate the cost of essential life-saving imported drugs
  4. The list includes 10 HIV drugs and at least 4 cancer drugs, but haemophilia patients are likely to be the most affected by the decision
  5. The withdrawal of exemption for anti-cancer and HIV medicines will not affect patients as generic versions of these drugs are made in India

Did you know about Essential medicines?

  1. Essential medicines are those that satisfy the priority health care needs of the country’s population.
  2. They are generally based on the country’s disease burden, priority health concerns, affordability concerns etc.
  3. In India, NLEM (formed in 2011) decides the essential medicines.
  4. It is a dynamic list and is reviewed every 3 years to include or exclude drugs as relevant to the newest medical innovations and aligned to market competition.

Government brings 376 drugs under new list of essential medicines

This move will ensure their availability across the country at affordable prices.
  1. The Union Government has added 106 drugs including that of HIV/AIDS, Cancer and Hepatitis C to National List of Essential Medicines (NLEM).
  2. In this regard, Union Ministry of Health and Family Welfare’s core committee has revised the NLEM.
  3. The committee was headed by V.M. Katoch, former secretary of Department of Health Research.
  4. The revision includes addition of 106 essential medicines and deletion of 70 medicines.

What is drug price control?

  1. The Centre issued Drugs (Price Control) Order, 2013 to regulate the prices of drugs.
  2. It initially brought under price control 652 medicines or formulations based on 348 bulk drugs listed under the National List of Essential Medicines.
  3. The ceiling price of essential medicines has been fixed based on the weighted average of the prices (MRP) of all brands of that drug that have a market share of at least 1%.
  4. If any medicine is priced lower than the ceiling fixed by the regulator, then companies selling such drugs should maintain the existing or lower retail price.

Govt. forms committee to review drug pricing policy

The committee will look into the pricing of medicines, and specifically in the market based pricing formula.
  1. Inter-ministerial committee to review the Drug Price Control Order (DPCO) 2013,
  2. Following Supreme Court verdict that termed drug pricing policy as irrational and unreasonable.
  3. The committee look into the pricing of medicines, and specifically in the market based pricing formula which is being used at present under DPCO 2013.
  4. The NGO had in a petition said, Market Based Pricing (MBP) was never used for any price regulatory purposes and this making medicines costlier.
  5. As stipulated under DPCO 2013, drug price regulator NPPA fixes the ceiling price ofessential medicines of schedule-I.

Pharma Jan Samadhan: an online portal by Min. of Chem & Fertilizers

  1. Web enabled system for redressal of consumers’ grievances relating to pricing and availability of medicines.
  2. Created by National Pharmaceutical Pricing Authority (NPPA).
  3. Will check the menace of – overpriced medicines|shortage of medicines | sale of medicine without approval of NPPA.
  4. NPPA will initiate action on any complaint within 48 hrs of its receipt.



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