Drug cos face stricter checks on road to pricing freedom
Pharmaceutical companies will now have to face in-depth scientific scrutiny on how therapeutically useful are the ingredients that go into a medicine in order to charge a price for it.
By Gireesh Chandra Prasad, TNN |
NEW DELHI: Pharmaceutical companies will now have to face in-depth scientific scrutiny on how therapeutically useful are the ingredients that go into a medicine in order to charge a price for it.
The drug price watchdog, National Pharmaceutical Pricing Authority (NPPA), is revamping its pricing norms to incentivise companies for using sophisticated ingredients and packaging material but will subject them to a greater technical scrutiny on whether they actually improve the quality of the medicine. If the ingredients and packing material are found to enhance the quality and shelf life of the drug, then that brand would be granted a higher price.
Companies have been claiming that the rigid pricing norms prevent them from adopting high-quality inputs and packaging. The tough scrutiny of ingredients, aimed at ensuring that unnecessary cost is not passed on to consumers, will be outsourced to expert agencies.
Presently, NPPA prescribes a lower cost slab for inputs called excipients that merely change a drug’s colour or other physical properties, while therapeutically active ingredients are given a higher cost mark up. Because of this, companies often tend to pass the higher-cost excipients as inputs that are critical for the efficacy of the medicine. Now, the regulator has decided to review the list of ingredients to see if anything the industry uses is missing. Once it is ascertained, the regulator will evolve pricing norms for those components with the help from experts.
NPPA is also in the process of roping in the Indian Institute of Technology, Kanpur, to ascertain whether a particular ingredient improves a drug’s efficacy or is used to overcharge the consumer. The institute’s help will be sought on a case-to-case basis when a company approaches the regulator for getting price approval for a particular drug.
Besides, NPPA is also going to allow enough price flexibility to companies for using futuristic packing materials if they enhance the shelf life of a drug. The regulator will allow companies to claim
NPPA will rope in Indian Institute of Packaging, Mumbai, for technical advice. The regulator has also signed an MoU with the Indian Institute of Science, Bangalore, in this regard.
The drug price watchdog, National Pharmaceutical Pricing Authority (NPPA), is revamping its pricing norms to incentivise companies for using sophisticated ingredients and packaging material but will subject them to a greater technical scrutiny on whether they actually improve the quality of the medicine. If the ingredients and packing material are found to enhance the quality and shelf life of the drug, then that brand would be granted a higher price.
Companies have been claiming that the rigid pricing norms prevent them from adopting high-quality inputs and packaging. The tough scrutiny of ingredients, aimed at ensuring that unnecessary cost is not passed on to consumers, will be outsourced to expert agencies.
Presently, NPPA prescribes a lower cost slab for inputs called excipients that merely change a drug’s colour or other physical properties, while therapeutically active ingredients are given a higher cost mark up. Because of this, companies often tend to pass the higher-cost excipients as inputs that are critical for the efficacy of the medicine. Now, the regulator has decided to review the list of ingredients to see if anything the industry uses is missing. Once it is ascertained, the regulator will evolve pricing norms for those components with the help from experts.
NPPA is also in the process of roping in the Indian Institute of Technology, Kanpur, to ascertain whether a particular ingredient improves a drug’s efficacy or is used to overcharge the consumer. The institute’s help will be sought on a case-to-case basis when a company approaches the regulator for getting price approval for a particular drug.
Besides, NPPA is also going to allow enough price flexibility to companies for using futuristic packing materials if they enhance the shelf life of a drug. The regulator will allow companies to claim
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a higher cost for such sophisticated packing material.NPPA will rope in Indian Institute of Packaging, Mumbai, for technical advice. The regulator has also signed an MoU with the Indian Institute of Science, Bangalore, in this regard.
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