Recently, there has been a flutter in various media channels and newspapers as to how the Modi Government has reversed certain drug price control measures announced in July 2014. As a result, we are told, prices of these drugs would increase much more than pre-July levels. This was supposed to be a sequel to Modi’s visit to the US, and presumed American pressure.
We do not know how much the Modi Government will eventually buckle on various fronts to various interests. It may. It may not. But the news in the media on the said price control reversal is incorrect.
Drugs not in NLEM (the National List of Essential Medicines, 2011) can be put under price control in public interest, under extraordinary circumstances, and for such time as the Government sees fit – according to Para 19 of the Drug Price Control Order (DPCO) 2013.
In May 2014, the National Pharmaceutical Pricing Authority (NPPA) had put out certain internal guidelines clarifying how Para 19 can be used to put under price control, life saving drugs not in NLEM. On July 10, 2014 the NPPA actually put 108 non-NLEM drugs – that included many life saving antidiabetics and cardiovasculars – under price control.
That is, the 108 drugs cannot be sold at more than the notified ceiling prices. In addition, all 348 drugs in NLEM 2011 are already under price control since May 2013.
Pharmaceutical lobbies, multinational and local, reacted with predictable brouhaha. They said putting these 108 drugs under price control in addition to the 348 drugs of NLEM already under price control, will further destroy the pharma industry, and drive the final nail on the coffin of India’s image as an investment destination. For good measure, they also filed cases in the Bombay HC and Delhi HC asking for stay and reversal of these measures. No stay orders have been issued. The cases are continuing.
So the same pharma lobbies approached the Central Government, repeating the same chant of how this will destroy their industry. What followed was curious.
The Secretary, Department of Pharmaceuticals (DOP), under whom the NPPA functions, in a written communication dated September 22, 2014, directed the NPPA to withdraw the guidelines. These guidelines, that clarified the logical basis for the ceiling prices announced on the 108 life saving drugs, were therefore withdrawn. A Government press release separately however clarified that only the guidelines, but not the orders on the price control of the 108 drugs, are withdrawn. But hereafter the NPPA cannot put other categories of life saving drugs (such as antiasthmatics and antimalarials) under price control, using the interpretation of Para 19 given in the guidelines. The pharma lobbying worked!
To be safe, the DOP had consulted the Solicitor General of India, who opined that the interpretation of Para 19 as given in the NPPA’s guidelines of May 29, 2014 is not correct. Para 19 can henceforth be used only as per a restricted interpretation of the Solicitor General, confined to rare cases of “emergency”.
Civil society organisations, who have also intervened in the matter in the courts, think the DOP’s move is not in the interest of the people of India and the opinion of the Solicitor General is plain wrong.
In the meanwhile, almost all affected MNC companies have implemented the price control measures and are selling at reduced prices. These developments have nothing to do with ceiling prices of the 348 drugs in NLEM 2011. Those ceiling prices still stand - contrary to the disinformation being propagated.
The writer works on pharma pricing policy issues, is an interested party from the civil society, and is associated with Locost and Aidan (All India Drug Action Network.)