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NPPA: India's only drug pricing watchdog is here to stay

Vishakh Unnikrishnan | Updated on: 11 February 2017, 5:45 IST

The National Pharmaceutical Pricing Authority is India's drug pricing watchdog. While it may not have a mandate that one would expect, its past decrees did have an impact on the pharmaceutical industry as well as consumers.

The NPPA had in December last year capped the price of over 50 essential drugs that included drugs to treat HIV infection, anxiety disorders, diabetes and other bacterial infections.

In some cases, this meant a price cut of up to 40% and it fixed retail pricing of 29 drug formulations.

The NPPA was set up way back in 1997 with an aim to monitor the prices of essential drugs. The latest order by the authority known as the Drug Price Control Order (2013) presently caps prices of 432 medicines based on how "essential" they are to the common man.

The price of stents

The NPPA, after finding out that some hospitals were hiking the price of stents to more than a ridiculous 600%, has decided to cap the price of stents but has not yet decided on the cap or released an order. Stents are tubes used to unclog coronary arteries and prevent heart attacks.

The NPPA however, has come up with a procedure on pricing stents, which remains to be implemented. The authority has sought information on pricing and margins from stent manufacturers, distributors, marketers and importers which would be in tow with the government's notification to bring coronary stents under schedule-I of Drug (Price Control) Order, 2013.

The NPPA has listed the pricing of coronary stents under the National List of Essential Medicines (NLEM).

The NPPA found that stent manufacturers enjoy margins in the range of 20 to 56% while the distributors keep a margin ranging from 11% to as much as 196%. Furthermore, the hospitals keep a margin in the range of 11 to 600%.

Ananth Kumar, minister for chemicals and fertilsers, has also informed the media in a press conference that by next month, the prices of stents will be regulated.

The most important step, which has not yet been reported, is that the NPPA has asked distributors, manufactures and importers of stents to be registered on the Integrated Pharmaceutical Database Management System (IPDMS), a data bank of information which would essentially ensure the pricing of stents and allow the regulator to monitor them.

NPPA's survival

While the above decisions reflect the importance of NPPA, in November last year, there was a buzz that the body could be dismantled.

Sources in the ministry for chemicals and ferilisers told Catch that this was being considered. A source in the health ministry said that there are discussions on giving a 'new mandate' to the NPPA.

If the sources are to be believed, then NPPA won't have any teeth left to control drug prices and the onus will be entirely left with the Department of Pharmaceuticals (DoP).

However, sources from the Department of Pharmaceuticals have now stated that NPPA will not be dismantled and that the powers vested with the authority will stay.

"We are working towards providing affordable healthcare to all. This will continue. We are in the process of opening up more Jan Aushadi drug stores (government stores that supply generic medicines)," the source said.

Moreover, NPPA's chairman Bhupender Singh has also stated that he was not informed about the idea of dismantling the body or changing its mandate. He also stated that NITI Aayog (which had initially flouted the idea of doing away with the NPPA) does not have the power to dismantle the authority nor change its mandate. For now this is good news.

First published: 23 January 2017, 7:50 IST
Vishakh Unnikrishnan @sparksofvishdom

A graduate of the Asian College of Journalism, Vishakh tracks stories on public policy, environment and culture. Previously at Mint, he enjoys bringing in a touch of humour to the darkest of times and hardest of stories. One word self-description: Quipster.