Parliamentary Standing Committee on Drug Pricing

Key Observations:

1. Concern Over Public Health Impact:

   • The Standing Committee on Chemicals and Fertilizers raised serious concerns regarding the impact of the 50% price increase on essential medicines, particularly in terms of public health. The committee emphasized the need to consider how these price hikes affect affordability and access to critical drugs for the general public, particularly those from lower-income groups.

2. Limited Justification:

   • The NPPA defended the price hikes by attributing them to factors such as rising production costs, the cost of Active Pharmaceutical Ingredients (APIs), and exchange rate fluctuations. However, the committee expressed concerns that the NPPA did not adequately consider the affordability of medicines for the public in their justification, making the increases appear more oriented towards industry interests than patient welfare.

3. Regulatory Gaps in Cancer Drug Pricing:

   • The Committee on Petitions (Rajya Sabha) highlighted the inadequate regulation of oncology drugs, noting that while the Drugs (Prices Control) Order (DPCO), 2013 had expanded its control over certain cancer drugs (from 40 to 63), many others remained outside price control. This lack of regulation leads to high and unaffordable drug prices, restricting access for cancer patients, especially in the context of the growing burden of cancer in India.

Key Recommendations:

1. Reconsider Price Hike Mechanism:

   • The committee recommended that the NPPA should re-evaluate its price hike mechanism and ensure that any increases in drug prices are reasonable, justifiable, and affordable for the public. The committee stressed that the decision-making process should prioritize public welfare and the accessibility of medicines.

2. Expand Price Control on Critical Drugs:

   • The committee urged the government to broaden the scope of price control to include a wider range of critical drugs, especially oncology drugs, which remain largely unregulated. This would make these vital medicines more affordable and accessible for all segments of society, especially vulnerable populations.

3. Ensure Transparency in Price Adjustments:

   • Future price hikes should be transparent and backed by clear criteria that prioritize public welfare. The committee emphasized that the NPPA should provide detailed explanations for any price increases, ensuring that the process is transparent and easily understandable for the public.

4. Stronger Oversight on Non-Essential Drugs:

   • The Standing Committee recommended that NPPA increase its oversight on non-essential drugs, ensuring that manufacturers do not raise Maximum Retail Prices (MRPs) by more than 10% annually without sufficient justification. This would help control excessive price hikes in non-essential drugs, which could contribute to the overall inflation of drug prices in the market.

5. Regular Monitoring and Inclusion:

   • Regular monitoring of drug prices and their impact on affordability is crucial. The committee recommended the inclusion of a wider range of medicines under price control to ensure that all essential drugs, including those for chronic and life-threatening conditions, are accessible to the general public.

What is the National Pharmaceutical Pricing Authority (NPPA)?

The NPPA is India's independent drug pricing regulatory authority, responsible for ensuring the availability and affordability of medicines in the country. It operates under the Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers.

• Constitution: The NPPA was established in 1997 to oversee and regulate the pricing of medicines, balancing the needs of public health with the economic growth of the pharmaceutical sector.

• Role: NPPA's primary responsibilities include regulating the prices of essential medicines, ensuring adherence to price control orders, and keeping drug prices under check for public welfare.

Functions of NPPA:

1. Price Regulation:

   • NPPA ensures that the prices of essential drugs listed under the National List of Essential Medicines (NLEM) are controlled and remain affordable to the general population.

2. Outreach & Transparency:

   • The NPPA has made significant strides in improving transparency and accountability through initiatives such as the Pharma Sahi Dam platform, which provides detailed information on medicine prices, and Pharma Jan Samadhan, a grievance redressal platform for consumers.

3. Data & Monitoring:

   • The Integrated Pharmaceutical Database Management System (IPDMS 2.0) is a digital tool developed by NPPA to enhance monitoring and transparency within the pharmaceutical sector.

4. Market Monitoring:

   • NPPA operates Price Monitoring and Research Units (PMRUs) in 31 States and Union Territories to track prices and ensure that manufacturers comply with the Drugs (Prices Control) Order (DPCO).

Role of NPPA in the Indian Pharmaceutical Sector:

India’s pharmaceutical industry is one of the largest in the world, valued at USD 50 billion (2023-24), with projections to reach USD 130 billion by 2030. As the "Pharmacy of the World," India plays a critical role in supplying generic drugs to countries worldwide. The NPPA is tasked with maintaining a balance between consumer affordability and the growth of the industry, ensuring that medicines remain accessible to all Indians.

Pharma Sector Regulations in India

1. Central Drugs Standard Control Organization (CDSCO):

   • Responsible for regulating the manufacturing, distribution, and sale of drugs and medical devices in India.

2. Drugs and Cosmetics Act, 1940:

   • Governs the quality and safety of drugs and cosmetics in India, ensuring public health protection.

3. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954:

   • Regulates misleading advertisements and claims made about drugs and remedies, ensuring ethical practices in marketing.

4. National Medical Devices Policy, 2023:

   • Aims to strengthen the Indian medical device industry, ensuring the production and accessibility of quality devices in the healthcare system.

5. Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS):

   • A scheme aimed at enhancing the manufacturing capabilities of pharmaceutical industries by upgrading technologies and ensuring the production of high-quality medicines.

Conclusion

The Parliamentary Standing Committee's concerns about the 50% price hike in essential medicines have shed light on the tension between affordable access to medicines and the economic pressures faced by the pharmaceutical industry. The NPPA must recalibrate its approach to price hikes, with greater transparency, stronger oversight on non-essential drugs, and a more robust regulatory framework for critical medications like oncology drugs.