Drugs may face price check at entry point too
The drug price regulator has prescribed another antidote to what many would term profiteering.
By Gireesh Chandra Prasad, TNN |
NEW DELHI: The drug price regulator has prescribed another antidote to what many would term profiteering. The National Pharmaceutical Pricing Authority (NPPA) has asked the government to have a second look at the freedom enjoyed by pharma companies to choose the introduction price of a brand. It is concerned about the abuse of this flexibility. The companies can use the route to circumvent checks on abnormal price hikes of control-free brands.
At present, NPPA can intervene if the annual price rise is more than 10% (earlier the ceiling was 20%).
With all brands that breach the ceiling coming under price control, the tendency to inflate the price initially to avoid getting caught later may be high, sources said.
NPPA has suggested that the government amend the drug law to address the issue of entry-level price. The recommendation assumes significance since the group of ministers reviewing the new pharmaceutical policy is set to hold its second meeting early next month.
The ministry of chemicals and fertilisers is already working on a similar proposal to regulate the entry price of patented medicine. Here the idea is to ensure that companies do not go too far in exercising their exclusive rights while launching cutting edge therapies. The government will translate the cheapest international price of a patented drug into probable Indian price and negotiate with the company.
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The manufacturer of a non-scheduled drugs (drugs not under direct price control) is not required to take price approvals from NPPA for such drugs. However, NPPA is required to monitor the prices of such drugs and take corrective measures where warranted, and that includes the power to fix and regulate such prices.Earlier, NPPA had homed in on large-volume procurement contracts of government agencies such as the Army, the Railways and state governments to discover overcharging by drug companies, if any, at the retail level. The Centre was alerted on the aspect by state governments.
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