New pharma policy likely to give more powers to NPPA

Anju Ghangurde

Mumbai, July 15: The new “Pharmaceutical Policy 2001” is expected to boost the powers of the National Pharmaceutical Pricing Authority (NPPA), the country’s apex drug pricing body.

Sources said that although prices of some bulk drugs have moved down, this is not reflected in the retail price of non-scheduled formulations. Besides, concern has also been expressed on the high commission/margins offered to the trade, much to the detriment of consumers.

In view of this, the NPPA, which was set up in 1997, is proposed to be provided with appropriate powers under the Drugs Prices Control Order (DPCO) which would make it mandatory for the manufacturer to furnish all information sought by it and also to regulate prices. Indications are that moves are afoot to ensure that the difference between the first sale price of a formulation by manufacturers and the retail price be limited to a maximum of 40 per cent of the maximum retail price (MRP) in the case of decontrolled drugs. However, the final position on this is not clear, sources added.

The NPPA, sources indicated, would also need to be restructured and reoriented to take into account the shift of the current monitoring and enforcement system from a controlled regime to a monitoring regime. The NPPA would also monitor the prices of decontrolled drugs and oversee the implementation of the DPCO. The new drug policy is expected to prune the number of bulk drugs under price control from 74 currently to around 37 (with a retail market coverage of roughly 25 -28 per cent on account of their formulations).

Significantly, the Drug Price Control Review Committee (DPCRC), which was set up to review the current price control mechanism, had also suggested that good manufacturing practices (GMP) requirements prescribed under the rules for the manufacture of drugs be upgraded to the levels of the WHO-GMP certification scheme.

It had further stipulated a deadline of two years, after which no manufacturing license under the Drugs and Cosmetics Act be renewed or issued to units which failed to conform to the minimum prescribed standards. Significantly, the government has also been urged to develop a price index for pharmaceutical products to review the price situation on a regular basis. This is moreso, given the allegations of dumping and under/over invoicing as the pharma sector is liberalised.