HYDERABAD: In an unusual move last month, the government appointed a super-regulator-of-sorts to fix prices of essential drugs, watering down the role of the National Pharmaceutical Pricing Authority (NPPA).
Until recently, the NPPA fixed and monitored prices of essential drugs, but from hereon, a high-level committee under the policy think tank NITI Aayog will identify drugs and recommend pricing caps.
The move is both hailed and dismissed by proponents and opponents respectively. The favourable camp (read pharma lobbies) says drug pricing will be balanced, given the collective thinking of the seven-member committee as opposed to the sole authority of NPPA chairperson. On other hand, healthcare groups and activists argue that it will make NPPA a toothless tiger, and that giving unbridled powers to the committee could have damaging repercussions for the public and access to medicines. Besides, it could weaken enforcement against overpricing.
The NPPA was given sweeping powers in 2013 to control prices, but it was only in 2017 that it made some jaw-dropping decisions, slicing prices of drugs and even medical devices like heart stents to the bone. This attracted the ire of the industry, which cried foul about eroding profits. The truth is, a mere 750 formulations are under price control now and 80 per cent of the drugs continue to be out of NPPA’s ambit. So far, prices of medicines and devices listed under the National List of Essential Medicines (NLEM) are fixed by NPPA, while non-scheduled list are allowed a maximum 10% annual price hike.
Pharma lobbies accused the NPPA of misusing its special powers conferred under Paragraph 19 of the DPCO 2013 to expand price control beyond the NLEM. It was even accused of getting influenced by healthcare activists, and for showing a cold shoulder to the industry, whose efforts helped cure diseases and improve life expectancy. Thus, pharma lobbies reasoned that a little profit-making by drug makers was justifiable.
According to sources, the committee was the result of the tug of war between the Ministry of Chemicals & Fertilizers and the Ministry of Health & Family Welfare. The former constituted the latest standing committee, while the latter prepares the list of drugs eligible for price regulation, while the DoP incorporates NLEM into Schedule 1 of the DPCO.
Critics argue that with elections just away, perhaps the government doesn’t want to upset the industry, which happens to be a crucial cog in creating employment. The sector is an essential part of initiatives like Make in India, which helps reduce our dependence on imports of bulk drugs and drug intermediaries.
But concerns persist that the presence of finance ministry officials and DIPP may sway pricing decisions in favour of the industry. Worse, prices on some medicines under NLEM could be even rolled back if pharma lobbies have their way. The government reasons that the new committee will balance corporate and public interests, but given the responsibility of providing affordable healthcare weighing heavily on authorities, the tussle between profits and patients will likely continue in the days to come.