Essential drugs may come under price control

The regulator, under the new scheme, would call for cost-data from the top five formulators of each bulk drug and use it to set the price ceiling.

The policy is likely to put the entire national list of essential medicines (NLEM) "" comprising 354 bulk drugs "" under the authority's (NPPA) cost-based price control. This would exert unprecedented pressure on the pharma watchdog's infrastructure and manpower.

Many in the industry and ministry agree that using its methodology on 354 drugs would be a formidable task for the NPPA. At present, the NPPA conducts cost studies and sets ceilings for only 74 bulk drugs. Bulk drugs are basic ingredients which go into the making of formulations that are in turn consumed in the form of syrups, tablets, capsules etc.

"To tackle this issue of workload, the NPPA would call for average cost data based on invoices etc from formulators and use them for cost-based studies, rather than conducting them," said an official from the chemicals and petrochemicals department.

This would take up less time and do away with the industry's allegation of arbitrariness against the NPPA, he added.

The top five formulators of each bulk drug according to ORG-IMS data, would be called in to supply information on costs. The NPPA would merely monitor credibility by corroborating it with imports data, cost data of PSUs and publications like the Chemicals Weekly.

The government is considering several other steps aimed at infusing transparency in the regulator's functioning. One of these includes introduction of a system of self-assessment of drug costs by manufacturers. The NPPA will merely undertake random checks on 5 per cent of all filings.

Another step will be to introduce an interactive forum within the NPPA that would involve consumer groups, industry associations and states.

The forum itself, would have a national level body and four regional forums.