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Consumers will see a change in their medicine prices by mid-August, but medicine-related data continues to be a stumbling block for the National Pharmaceutical Pricing Authority (NPPA), says Chairman C.P. Singh.
The NPPA chief’s admission comes even as the pricing authority notified the first list of revised prices on about 150 drugs, in line with the Drug Price Control Order 2013.
The list is getting notified as the information comes in, Singh told Business Line , adding that there were about 150 drugs on which even IMS Health did not have information. This included some high-end oncology and hospital products.
Expensive data
The Government formalised its drug policy and price control order based on data provided by IMS Health, an international pharmaceutical market intelligence company.
In fact, during the run-up to the formation of the policy, pro-patient groups had cautioned the Government against using IMS data, since it was deemed proprietary and expensive.
The NPPA would now source from manufacturers and industry associations, the information that was not available with IMS, Singh said, adding that his first task was to get the revised list of medicines out, so that consumers could get drugs at reduced prices.
By the end of this month, the NPPA expected to notify the revised prices of another 300-odd drugs, he added.
The ambit of price control was extended to all 348 drugs in the National List of Essential Medicines (NLEM), under the watch of the Supreme Court.
Singh further pointed out there was a “calculation confusion” involving about 49 medicines in the first list of revised drug prices. The NLEM is specific; it mentions the type of drug, tablet or syrup and its particular strength that comes under price control.
Calculation glitches
Errors had cropped up in some cases, as pricing had been calculated across the different types (tablet and syrup) or different strengths, Singh explained.
In fact, the first list hit a sour note for the industry, which complained that the formula used to calculate the ceiling price of the listed medicines was contrary to the agreed formula — a simple average of all products in a said category with one per cent market-share.
“We understand that the first lot of prices being notified is calculated using brands and generic versions having less than one per cent market share for companies having more than one brand.
"This is contrary to the above noted provisions and could distort the balance sought to be achieved by the NPPP (National Pharmaceutical Pricing Policy) 2012,” the Indian Pharmaceutical Alliance said in a letter to the NPPA Chairman.
Degrees of Impact
While the glitches get sorted out by the NPPA, industry observers estimates drug prices to dip between 10 and 75 per cent, depending on the drug and dosage form.
They span antibiotics, anti-infectives, pain, dermatology, gynaecology, cancer drugs, cardiac medicines, diabetes drugs etc. Large multinationals as well as local drug-makers, including GlaxoSmithkline, Sanofi, Novartis, Abbott, Ranbaxy, Zydus Cadila, Dr Reddy’s, Cipla, Sun and Lupin, will see varying degrees of impact because of price-control.
The industry will see a revenue loss of about Rs 1,500 crore, industry representatives have estimated in the past.
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