NPPA may get power to verify landed cost of drugs

NEW DELHI, 3 OCT: The drug price watchdog may get powers to verify landed cost of drugs that are under its control. The government is considering amendments to the drug pricing law to authorise the National Pharmaceutical Pricing Authority (NPPA) to seek details of landed cost of medicines. Landed price refers to the cost of medicines when they reach Indian shores. The regulator fixes the price of these drugs on the basis of this. "Changes and modifications are needed to make drug price regulation more effective," a senior government official said. The NPPA had approached the department of pharmaceuticals (DoP) requesting it to take up the issue with other ministries. Under current laws, the NPPA cannot fix prices of patented drugs and most imported medicines used for treatment of illnesses such as cancer. The scope of price regulation is further limited because the Drug Pricing Control Order (DPCO) allows the regulator to only monitor drugs made by using any of 74 named ingredients. About half of these ingredients are no longer being used. Over 1,000 imported formulations are sold in India. A revision of the drug pricing laws will go a long way in reducing prices and bringing them within the reach of the poor, according to some experts. The Indian Pharmaceutical Alliance, a lobby group, says current laws are skewed in favour of MNCs as only domestic drugmakers are required to give details of how they have arrived at the cost of production. "Instead of encouraging indigenous drugmakers, they are penalised," IPA secretary-general D G Shah said. "The move is not to give draconian power to the watchdog or hamper the industry's growth but to make prices of drugs affordable and encourage indigenous production of medicines," the government official said. The NPPA had earlier this year tried to check details of landed cost when an American company sought a sudden "sharp increase" in cost of production of its brand. But its move was shot down by a court after the law ministry conceded that the NPPA did not have the authority. India adopted a new patents regime in 2005, which gives 20 years of exclusive marketing rights to patent holders. To mitigate loss of revenue in their home markets, global drugmakers have launched a slew of their original drugs in India, mostly imported. Most of these drugs are expensive and beyond the reach of the masses. However, some experts said NPPA's move would not be very effective, as several imported medicines fall outside the ambit of the control mechanism.

Economic Times