The department of pharmaceuticals (DoP) will soon put in place a mechanism to prevent drug companies from circumventing price control by changing the composition and strength of their formulations. The move comes in the wake of a parliamentary standing committee report, which has directed DoP to identify such drugmakers and modify the drug-pricing order to incorporate stringent penalties for tweaking the composition of essential medicines in order to circumvent
The panel has also recommended that the department should take stringent action against such companies in consultation with the heath ministry.
“The committee also desires that National Pharmaceutical Pricing Authority (NPPA) should not hesitate to invoke the relevant provisions to curb such alleged malpractices by the drug companies,” said the parliamentary standing committee on chemicals and fertilisers in its 38th report. The pharma department falls under the ministry of chemicals and fertilisers.
Companies often tweak the composition of medicines or change their strength to circumvent price control. Drugmakers also shift essential drugs to the ‘dietary supplement’ category by adding vitamins to prevent being monitored by the Drugs and Cosmetics Act.
The parliamentary panel has also asked DoP to evolve a mechanism to regulate the prices of non-scheduled drugs at a reasonable level. “The committee, therefore, recommends that the department should also take initiative to evolve a price mechanism for non-scheduled drugs with a view to ensure the availability of all such drugs to the consumers at affordable prices”.
The new drug price control order (DPCO 2013), which puts a price cap on around 650 medicine formulations under 27 therapeutic areas, is already mired in legal controversies with pharma companies like Cipla, Sun, Alembic and others moving court over the government’s direction to replace stocks in the market with those carrying reduced prices within 45 days of the new price notification.
“The committee noted that pharma companies frequently change the composition/strength of their formulations to circumvent the provisions of DPCO. In order to escape the provisions of the DPCO, pharma companies are also using the via-media of dietary supplements under the Prevention of Food Adulteration Act, 1954 and flooding the retail market by medicines