New drug price regime soon

Regulation a part of much larger 'pharmaceutical policy' framework.

A new drug pricing regime is expected to be rolled out by the end of this year. The new Drug Pricing Control Order (DPCO), which will replace the present one, is expected to be part of a much larger "pharmaceutical policy" framework.

For the DPCO, the recommendations of both the task force for pharma pricing, and the Sandhu Committee, are likely to be considered. There is also a proposal to strengthen its monitoring and executive body, the National Pharmaceutical Pricing Authority (NPPA).

While the Sandhu Committee's suggestions would be on price control issues, trade margins and bulk purchases, the pharma task force was likely to contribute some far reaching measures in terms of debranding of generics, setting of reference prices and making patented drugs a prime candidate for price negotiations, informed a chemicals and petrochemicals ministry official.

Dubbing the Essential Commodities Act as "draconian", which covers the DPCO at present, an industry source hailed this as a "much-needed step" where the "government stance would change from one of price control to that of price negotiation".

In the proposed pharmaceutical policy, which may well become an Act, a slew of measures have been suggested.

With the recent implementation of the Good Manufacturing Practices, thousands of small-scale pharma companies are likely to shut down. To aid such companies, a fund may be created to disburse loans for upgrade and modernisation.

The corpus of the fund, loans being interest-free or attracting interest subsidy, was a matter of detail and under consideration, the official said.

To promote debranding of generics and increased public awareness, a government website is expected to come up listing the prices of all the generic equivalent of a drug ensuring that the consumers can shop for the cheapest one.

An "illness assistance" for the below poverty line (BPL) families is also said to be a part of the proposed policy which will provide some kind of an insurance cover where both treatment and drugs will be provided free of cost.

At present, there is a fund in place to which both the Centre and states contribute for medical needs of the BPL population but its quantum has dwindled from Rs 25 crore a decade back to mere Rs 3.5 crore now. An emphasis on broadbasing this support will also be made a part of the policy.

Besides, a tax rebate of 200 per cent for an extended period of 10 years is also said to be a part of the upcoming policy taking into account the massive research and development (R&D) expenditures that pharma companies incur.

In the new patents regime, such R&D expenses had become categorically essential, added another source.

---

New Drug rules

The DPCO will consider the recommendations of the task force for pharma pricing as well as the Sandhu Committee

The Sandhu Committee's suggestions pertain to price control issues, trade margins and bulk purchases

The Pharma task force is likely to contribute some measures in terms of debranding of generics