Drug cos refuse to take sole responsibility for overpricing

New Delhi | Mumbai: India's pharmaceutical companies, cutting across size, have opposed a regulatory proposal that holds them accountable for overpricing of medicines while exempting retail chemists, hospitals and nursing homes from prosecution and punitive action. However, a powerful body of retail chemists has welcomed the move.

Several pharmaceutical groups, including the Federation of Pharma Entrepreneurs (FOPE), have sent their representations to the National Pharmaceutical Pricing Authority (NPPA). ET reported this last week.

FOPE national president Harish K Jain said the proposal would upend the existing distribution of responsibility under the Drugs (Prices Control) Order (DPCO), 2013, and impose an "unreasonable and disproportionate burden" on manufacturers who are already compliant with pricing rules.

Meanwhile, the All India Organisation of Chemists and Druggists (AIOCD), which represents retailers, stockists and distributors, said trade members would be shielded from prosecution for pricing decisions made by manufacturers. The body had pleaded with the NPPA to incorporate these safeguards in the final amendment and offered its cooperation in developing a standard operating procedure for the enforcement of the proposed regulations.

AIOCD general secretary Rajiv Singhal said a bona-fide chemist should not be penalised for a pricing violation committed by a manufacturer, particularly when the medicine has been purchased through a legitimate supply chain. He urged the NPPA to ensure no retrospective liability on existing stock, a 75- to 90-day transition period and clear statutory protection for retailers, stockists, distributors, clearing and forwarding agents and hospital pharmacies.

FOPE in its letter, however, said whoever actually sets the price charged to a patient at the point of sale should be accountable for that price.

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The federation pointed to para 26 of the DPCO, which bars "any person", not manufacturers alone, from selling a formulation above the price listed or printed on the pack. According to it, this language already establishes that retailers, hospitals and other sellers share responsibility, since they are the ones who interact directly with consumers, set the final transaction price and control the sale itself.

By contrast, FOPE said manufacturers' obligations under the DPCO framework covering para 14 and paras 24 and 25 on price communication are limited to declaring accurate maximum retail prices, complying with NPPA's price notifications, and filing the required forms through the government's integrated pharmaceutical database management system (IPDMS). Once that information is submitted and made public, the federation argued, subsequent overcharging by a downstream party falls outside the manufacturer's control and should not automatically trigger manufacturer liability.

Another member of the pharma lobby group said they conveyed their disagreement to the NPPA about the proposal. "The onus of overpricing should not be on the manufacturer alone. We have asked the NPPA to put the proposal on hold," he told ET on the condition of anonymity.