The Central government passed the order, citing “extraordinary circumstances” and “public interest.”
The story so far:
On October 14, the National Pharmaceutical Pricing Authority of India (NPPA) increased the ceiling prices of eight drugs, comprising medication for common diseases including asthma, tuberculosis, bipolar disorder, and glaucoma, among others. Prices have been increased by 50%.
What is the reason cited by the government:
The Central Government passed the order, citing “extraordinary circumstances” and “public interest.” The NPPA comes under the department of pharmaceuticals under the Union Ministry of Chemicals and Fertilizers, and a government release stated that it increased prices in greater public interest.
“The NPPA’s mandate is to ensure availability of essential drugs at affordable prices and ensure affordability without jeopardising access. Essential drugs must remain available, and their price regulation should not lead to a situation where these drugs become unavailable,’’ it said.
The NPPA added that it has been receiving applications from manufacturers for upward revision of prices, citing increased cost of active pharmaceutical ingredients; increase in the cost of production; and a change in the exchange rate, making production and marketing of the drugs unviable. Companies also applied for discontinuation of some formulations on account of their unviability.
How are prices of drugs controlled in India:
The NPPA, constituted in 1997, regulates ceiling prices of drugs and has the power to fix costs under what is known as a ‘Drug Price Control Order’ (DPCO) issued by the government under the Essential Commodities Act.
The Central Government said the decision to hike the cost of drugs comes after deliberations in a meeting on October 8. It invoked extraordinary powers under Para 19 of the DPCO, 2013. The NPPA approved an increase in ceiling prices of eleven scheduled formulations of eight drugs by 50% of their current ceiling prices, in the larger public interest.
“Most of these drugs are low-cost and generally used as first line treatment crucial to the public health programmes of the country,’’ it said.
Formulations for which ceiling prices have been revised include: atropine injection 06.mg/ml; streptomycin powder for injection 750mg and 1000mg; salbutamol tablet 2mg and 4mg and respirator solution 5mg/ml; pilocarpine 2% drops; cefadroxil tablet 500mg, desferrioxamine 500mg for injection; and lithium tablets 300mg.
Such extraordinary powers have been invoked by the NPPA in 2019 and in 2021 whereby prices of 21 and 9 formulations respectively were increased by 50% to ensure continued availability of essential drugs.
Section 19 of the DPCO allows the government to revise the ceiling cost. This can be done in extraordinary circumstances.
Section 19 states: “Notwithstanding anything contained in this order, the Government may, in case of extraordinary circumstances, if it considers it necessary to do so in public interest, fix the ceiling price or retail price of any drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the government may allow an increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of annual wholesale price index for that year.”
Does drug pricing see an annual revision:
Every financial year starting April 1, the NPPA increases ceiling prices of drugs based on Wholesale Price Index (WPI) of the preceding year.
Pricing of drugs in India is strictly controlled by the Central Government and the NPPA monitors prices of scheduled as well as non-scheduled medicines under the DPCO, 2013. Action is taken against companies found selling formulations at prices higher than the permissible price, and overcharged amount is recovered. During 2023-24, ₹72.73 crore was recovered from defaulting companies.
Additionally, according to the Drugs and Cosmetics Act, 1945 and Rules, manufacturers of drugs are required to comply with conditions of the manufacturing licence and the requirements of Good Manufacturing Practices (GMP). According to Drugs Rules, 1945, manufacturing, testing, labelling, packaging, storage, and distribution are required to be carried out in compliance with the conditions of license including Good Manufacturing Practices (GMP) prescribed under Schedule M of the Drugs Rules, 1945. In case of violation, the Licensing Authority is empowered to act.
(Bindu.p@thehindu.co.in)
Published – October 25, 2024 06:00 am IST
