IDMA urges DoP to set up separate pricing mechanism for new patented drugs to make them affordable

Laxmi Yadav, MumbaiFriday, March 1, 2019, 08:00 Hrs  [IST]

In a bid to ensure accessibility of new patented drugs in the country, which are proposed to be kept out of price control for five years by Department of Pharmaceuticals (DoP), the Indian Drug Manufacturers Association (IDMA) has urged the DoP to set up a separate pricing mechanism for these drugs based on the concept of purchasing power parity during the exemption period.

The pharma lobby group in a representation also appealed to DoP to provide manufacturers of patented drugs five-year exemption from price control from the date of first marketing anywhere in the world, to be launched in India simultaneously, and not from the date of its commercial marketing by them in India.

Otherwise it will discourage indigenous manufacturers from conducting research and development on innovative dosage forms and novel drug delivery systems, said IDMA.

IDMA made representation to DoP secretary Jai Priye Prakash and joint secretary Navdeep Rinwa last month on draft Drugs (Prices Control) Amendment Order, 2019 proposing to amend paragraphs 9 and 32 of DPCO 2013 to exempt new patented drugs and orphan drugs from price control for five years from the date of commencement of its commercial marketing by the manufacturer in the country.

The industry body has expressed concern over proposed amendment to DPCO 2013 to deregulate prices of new patented drugs for five years. This will restrict patients' access to the drugs and put a dent to 'Make in India' initiative promoting indigenous manufacturing of drugs through research and development, it stated.

This will encourage patent holders to market the drug in India only almost at the end of patent expiry to extend the patent life. The amendment as notified does not provide any incentive for early launch of internationally patented drug in India and the innovator may delay application for regulatory approval in India to their commercial convenience, it added.

As these drugs will be out of purview of DPCO 2013, there will be no control on price or accessibility. Further, Indian patients can not afford international price of the product, which will be the case, in case of pricing freedom. While in the advanced countries, the insurance pays the cost, but in India, it is invariably out-of-pocket expense.

A separate pricing mechanism for patented drugs based on the concept of purchasing power parity will need to be set up for five years exemption to keep them reasonably affordable. This can encourage introduction of patented drugs but not at the same price, said IDMA.

The draft has proposed to introduce sub-paragraph (iv) under paragraph 9 which reads, “Drugs for treating orphan diseases as decided by the ministry of health and family welfare, government of India.”

The industry body has welcomed the proposal while emphasizing the need to define an orphan drug under DPCO 2013.

This provision is intended to increase and improve accessibility, especially of drugs for treating orphan diseases etc. In the short term, affordability may be hit unless alternate medicines are put in place. However, accessibility and affordability could improve substantially in the long term, the pharma lobby body added.

Also, this amendment should be extended to include rare and tropical diseases to encourage R&D and manufacture of drugs for such essential requirements, it said.

The draft further proposed to insert sub-paragraph (7) in paragraph 9 of DPCO 2013 which reads, “for fixing or revising the ceiling price for formulations, the government may, if it is necessary so to do, consider market based data available for any month, as deemed fit.”

IDMA said that the present practice is to refer to 'data available before six months of receipt of application for fixing the price of the new drug' as laid down in DPCO 2013 and referring to data for any month may not provide a level playing field.

It has sought DoP's urgent indulgence and support for the benefit of all stakeholders. The need of the hour is a stable pricing policy that allows industry to plan ahead. Also the need to be transparent and taking stakeholders into confidence. This will ensure better implementation of DPCO provisions amongst the manufacturers, the trade and the government authorities thus improving availability, affordability and accessibility of drugs for domestic patients, concluded IDMA.