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P A Francis
Wednesday, August 23, 2017, 08:00 Hrs  [IST]

According to a report published in a few major newspapers last week, the Central government has prepared a new draft national pharmaceutical policy seeking to bring some key changes in the current policy. The draft seeks to curb unfair marketing practices in sales of medicines, put a cap on trade margins and gradually introduce chemical names for medicines instead of brand names. The draft prepared by the Department of Pharmaceuticals also recommended restructuring of National Pharmaceutical Pricing Authority (NPPA). The draft further says about creation of an advisory body of experts to strengthen NPPA and at the same time take its absolute power to fix drug prices in public interest. Another bold proposal is to discontinue the loan licensing practice in this industry. The Prime Minister’s office had noticed, some time back, that many of the life saving drugs and medical devices are being sold at huge margins running up to 4,000 per cent in clear violation of the provisions of the Drug Price Control Order, 2013. To curb this unethical practice of pharmaceutical companies, a committee was formed in 2015 with Sudhansh Pant, joint secretary in the DoP as the head and representatives from NPPA, Competition Commission of India and other industry bodies as members. The report of the committee was submitted in January 2016. It seems that the draft pharmaceutical policy, now prepared, is mainly based on the recommendations of this panel.

It was after detailed discussions with all stakeholders, the Pant panel submitted a report in January 2016 prescribing a gradation system for capping the margins. It recommended a 35 per cent cap on medicines with MRP of Rs. 50 and above, and 50 per cent cap on medicines with MRP between Rs. 2–20. All medicines with MRP below Rs. 2 should be exempted from a cap on trade margin. The trade margin cap is proposed to be implemented on all drugs including generics, branded, scheduled and non-scheduled drugs. A total of 680 medicines are currently under the National List of Essential Medicines (NLEM) and is in the scheduled category of DPCO, 2013. NPPA already fixed the ceiling prices in respect of 530 of these medicines. In the case of medical devices also, the government has been quite serious to curb the practice of huge profiteering by the stent makers, hospital managements and the medical practitioners. And on February 14 this year NPPA fixed price caps for both drug eluting stents and bare stents. But even after six months of the order, patients are not getting the benefit of the government decision as stent makers and hospital managements are not in a mood to comply with the order. Again last week, the government capped the prices of various knee replacement implants with immediate effect. Most of the recommendations are likely to be opposed by the industry and trade as they threaten the profitability and even viability of this sector. Therefore the government needs to have detailed discussions on the draft once again with all stakeholders before finalizing the new policy.


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Pradeep Awasthi Aug 23, 2017 11:11 PM
The decision of central goverment to draft a new policy for pharmaceutical price fixing is indeed a smart decision,but its absolute implementation still remains debatable,As after the implementation of GST,many company had revised their prices and it shows slightly higher prices,which was before GST.
Though central government has shown their concern in favour of public interest,as since 2013 as described 680 drugs are under DPCO,but still the biggest question stands with big pharma companies is the loses which they bare with DPCO and to counter balance that loss and to improve their profitability on annual turn over,the newer formulations launch with higher price for counterbalance.These all aspects are highly debatable,So just drafting policy in sake of public interest is not an easy decision but it equally require stakeholders opinion before drafting policy.

In addition to this introduction of generic drugs,is certainly a great relief for people from higher burden
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