Draft NATIONAL PHARMACEUTICALS PRICING POLICY, 2011 approved by Union Cabinet : All stakeholders unhappy ---Debates galore !!!

Draft NATIONAL PHARMACEUTICALS PRICING POLICY, 2011 aimed at ensuring access of essential medicines was approved recently by Union Cabinet . It remains to be seen, whether this policy initiative which was received by both industry and civil society with much caution and skepticism, actually translates in benefits to patients, consumers vis-a-vis interests of manufacturers.

This comes in the backdrop of Report of the Task Force to Explore Options Other than Price Control for achieving the objective making available life-saving drugs at reasonable prices . This Task Force recommended that price regulation should be on the basis of ‘Essentiality’ of the drug and it should be applied only to formulations and not to upstream products, such as bulk drugs. Essential medicines are those that satisfy the priority health care needs of the population and are selected with due regard to disease prevalence, evidence on efficacy and safety, and comparative cost-effectiveness. An essential medicines list is a list of minimum medicines that a country should have, so as to be able to take care of the health needs of a majority of its population. If you were short of resources, you could at least stock these in sufficient quantities and at affordable rates. 

Source: http://apps.who.int/medicinedocs/es/d/Js2296e/2.html

Report of this Task Force also maintained that, "No effort should be made to impose a uniform price, and only a ceiling price should be indicated. The ceiling price of essential drugs should normally not be based on cost of production but on readily monitorable market based benchmarks. Other drugs falling into selected therapeutic categories should be brought under a comprehensive price monitoring system with mandatory price negotiations system, if necessary.A process of active promotion of generic drugs should be put in place including mandatory debranding for selected drugs. Public Sector Enterprises (PSEs) involved in the manufacture of drugs should be revived where possible and used as key strategic interventions for addressing both price and availability issues. The drug regulator must maintain a data base of brands and their compositions and no change should be permitted in the composition of a given brand."

WHO Framework for Medicine Pricing and Financing

Under the proposed policy, the ministry has moved away from the existing economic/market share principle-based criteria of price fixation to “essentiality” based price control. This change of criteria was warranted by an eight-year directive from the Supreme Court, which had asked the central government to formulate a medicine price control mechanism to cover all essential drugs. (Read here)

The proposal of NPPP 2011 to regulate prices of all the 348 drugs in the NLEM 2011, though paved with good intentions, has inbuilt ways to escape from price regulation. A list that is the basis for price regulation needs to cover all these 800-1,000 molecules. Therefore the NLEM 2011 with 348 molecules will defeat the purpose of price regulation. 

Background of New Policy:

The control over prices was on the basis of the cost of production with allowance being given to post-production expenses. Later around Yr 2000 when FDI norms in pharma sector were brought at the level of automatic route raising the limit to 100%. All drugs where unit price is Rs. 2 were excluded from the ambit of price control. There were also exemptions to the drugs developed through indigenous R&D. , new delivery systems etc. Twin challenge of ensuring industrial growth and ensuring public health is at loggerheads with shifting and interchanging priorities in the whirlwind of debate over new pricing policy in the context of details mentioned above.

Towards Practical applications of the essential medicines concept: How ? 

• Basic and in-service training of health care providers
• Public-sector procurement and distribution
• Medicine benefits as part of health insurance
• Drug donations and international aid
• Monitoring systems on availability and pricing
• Public education.

Facts: 

a) Directory of Pharmaceutical Units in India- http://nppaindia.nic.in/directory-nppa.pdf

b) List of Essential Medicine: http://pharmaceuticals.gov.in/NLEM.pdf

c) Medicine price information methodology by WHO: http://www.who.int/medicines/areas/access/ecofin/en/index.html

d) Mandate of Dept. of Pharmaceuticals: 

---> Promotion and co-ordination of basic, applied and other research in areas related to the
Pharmaceuticals sector.

---> Development of infrastructure, manpower and skills for the Pharmaceuticals sector and
management of related information.

---> Education and training including high end research and grant of fellowships in India and
abroad, exchange of information and technical guidance on all matters relating to pharmaceutical sector.

---> Promotion of public – private – partnership in pharmaceutical related areas.

---> International cooperation in pharmaceutical research, including work related to international conferences in related areas in India and abroad.

---> Inter-sectoral coordination including coordination between organizations and institutes under the Central and State Governments in areas related to the subjects entrusted to the Department.

---> Technical support for dealing with national hazards in pharmaceutical sector.

---> All matters relating to National Pharmaceuticals Pricing Authority including related functions of price control/monitoring.

---> All matters relating to National Institutes for Pharmaceuticals Education and Research
(NIPERs).

---> Planning, development and control of; and assistance to, all industries dealt with by the
Department.

--------------------------------------------------------