All essential drugs may come under price control

The Union ministry of chemicals and fertilisers has initiated a move to bring all essential medicines sold in the country under a price cap.

The move, if successful, will give the drug price regulator, National Pharmaceutical Pricing Authority (NPPA), the final say on the prices of about 17,000 packs of 354 drugs named in the National List of Essential Medicines (NLEM). The market size of these drugs is about Rs 7,000 crore. The ministry is exploring the possibility of invoking the "public interest" clause enshrined in the Drug Price Control Order (DPCO) to take charge in the pricing of these drugs.

NPPA, an autonomous body under the administrative control of the chemicals and fertiliser ministry, currently controls the price of just 20 per cent of the Rs 60,000 crore worth of medicines sold in the country annually. The move would mean close to 35 per cent of medicines would come under the regulator's control.

NPPA had earlier invoked the public interest provision under DPCO to bring intravenous fluids under price control about six years ago. The ministry wants to see if the prices of NLEM drugs can be fixed the same way. The Supreme Court had, in a directive that set aside a national pharma policy in 2003, wanted the government to formulate appropriate criteria to bring all essential and life-saving medicines under price control.

The government's attempt to follow the apex court directive had resulted in the formation of a draft pharma policy in 2006, which is yet to be finalised. A group of ministers (GoM) headed by Agriculture Minister Sharad Pawar, which looked into the draft policy during the previous UPA government, has been re-constituted to consider the draft policy. The GoM is yet to hold its first meeting.

For medicines not under NPPA control, there is a 10 per cent cap on annual price increase. The draft policy would have seen another 14 per cent of medicines come under price control. By trying to invoke the "public interest" clause, the minister's attempt is to bring these medicines under price control even without a supportive policy in place.

Such a move, however, may not be easy to implement, as NPPA will find it difficult to follow a price control criteria  not mentioned in the DPCO, industry experts said.