Wants to take control of medicine price regulator from the chemicals ministry.
The health ministry may oppose the market-based price fixing model suggested in the draft National Pharmaceutical Pricing Policy (NPPP).
The ministry is of the opinion that a market-based pricing strategy, which in a broad sense takes the average of the prices of top three brands as the ceiling price, will not result in any real price control.
In a separate move, the ministry has also written to the Planning Commission to consider shifting the medicine price regulator — the National Pharmaceutical Pricing Authority (NPPA) — from under the administrative purview of the ministry of chemicals and fertilisers to the health ministry. The suggestion, which forms part of the ministry’s XII Plan recommendations, is meant to turn the NPPA function from a health or patient perspective rather than an industry friendly one.
The NPPA, which fixes the prices of medicines notified as scheduled drugs under the Drugs Price Control Order, is now part of the Department of Pharmaceuticals, a bureaucratic arm set up for the development of the pharmaceutical sector. Health ministry officials said they are in the process of formalising their opinion on the draft pharma pricing policy before conveying it to the Department of Pharmaceuticals.
“There is a conflict of interest in fixing pricing of medicines and prescribing the growth of pharmaceutical industry. We have made a recommendation to hand over NPPA’s administrative control to the health ministry to enable us to take a holistic view of pricing of essential medicines,” a senior health ministry official said.
The policy was criticised severely by public health groups, who said the proposal to end the cost-based price control mechanism could result in high medicine prices. The industry had welcomed this shift by saying that it would bring in more transparency in fixing drug prices.
The pharma pricing policy was prepared after the Supreme Court wanted the Central Government to frame a drug policy that will bring all essential medicines under price control. While the drug policy has only 18 per cent of the Rs 62,000-crore drug market under price control, the proposed one will cover over 60 per cent of the domestic drug market. The new policy will see all medicines on the National List of Essential Medicines (NLEM)-2011 under price control.
According to industry estimates, the NPPP will result in a dip of up to Rs 3,000 crore in the industry’s net profits.
A senior health ministry official said the ministry, which finalises the list of essential medicines, may also add some more drugs to the recently updated list to accommodate some high priced life-saving drugs.
The health ministry is also proposing to provide all NLEM medicines free through public health institutions.
The pricing policy will be final only after a Cabinet approval. The department of pharmaceuticals has not given any timeline for finalising the policy.
