Union Ministry of Health is planning to bring 348 drugs of the National List of Essential Medicines (NLEM) under price control which is facing stiff resistance from the pharma industry. The ASSOCHAM estimates that around 75% of the industry will come under price control in case the draft National Pharmaceuticals Pricing Policy (NPPP, 2011) is pursued in its present form.
According to the government estimates that the new policy would bring 60% of the Rs 48,200-crore domestic formulation industry under the pricing control compared to 20% earlier. But the chairman of ASSOCHAM’s drugs and pharmaceuticals Council cautioned that it will cripple the pharma sector.
As per the ministry sources, more than 300 drugs were under the Drug Price Control Order (DPCO) in the early 1980s that was subsequently reduced to 140 in 1987. At present, prices of only 74 bulk drugs and formulations, containing any of these scheduled drugs, are under the price control regime. But once a medicine is brought under DPCO, it cannot be sold at a price higher than that fixed by the government.
NLEM has proposed 348 medicines that cover 489 formulations, including 16 fixed-dose combination under price controls. These drugs are considered to be adequate to meet the common contemporary health needs of the general population.
A Planning Commission panel observed that drug prices have shot up phenomenally in India over the past decade and a half. It pointed out that there was nearly 40% rise in all drug prices between 1996 and 2006. During the same period the price of controlled drugs rose by 0.02%, while those in the Essential Drug List (EDL) increased by 15%. The price of drugs that were neither under price control, nor under the EDL grew by 137%.
They suggested that all the drugs in the NLEM should be brought under price control since the cost of medicines constitutes over 60% of the total cost of healthcare.
However, ASSOCHAM president-elect R N Dhoot is of the opinion that only reduction in drug prices will not be able to provide access to medicines for all. The government should immediately remove all duties and taxes on all NLEM drugs to reduce cost burden on patients. He also recommended the retailer margin to be restricted to 16% and wholesaler margin to be 8%.
India’s latest NLEM has 348 essential medicines, while the 2003 list had 354. Around 47 drugs have been deleted from the 2003 list. However, no anti-cancer or anti-HIV drugs have been deleted. With the addition of around eight new cancer drugs in NLEM, 2011, the aggregate stands at 30. Carboplatin, Chlorambucil, Daunorubicin, Filgrastim, Ifosfamide, Imatinib, Mesna and Oxaliplatin are the new cancer drugs that have been included in the list. About 43 new medicines have been added in NLEM, 2011, which are from 27 therapeutic categories.