Proposed changes to expand drug price control

The government is all set to expand drug price control. But can it ensure implementation of the prescribed prices?

The Union ministry of chemicals and fertilisers is set to invoke the 'public interest' clause under the drug price control order to bring a massive 354 essential drugs and medicines under a price cap as against a mere 74 today. This move will mark a policy reversal after several years of lobbying by the drug and pharmaceutical industry, which had succeeded in whittling down the list of price-controlled drugs from 347 to 74 over the past three decades. 
While this is an important move from the consumers' perspective, a lot will depend on the lobbying powers of the industry. According to industry sources, "There have been some moves from chemicals and fertilisers minister MK Alagiri, who has asked the National Pharmaceutical Pricing Authority (NPPA) to write to the law ministry to process the order."

Meanwhile, several top drug company lobbyists are understood to have rushed to New Delhi to convince the ministry against such drastic action. According to our source, the move could be "stillborn" unless the minister receives support from the prime minister and the Congress high command.
Under the proposed move, the NPPA list of 354 'price-controlled' drugs will cover a market size of Rs7,000 crore. These will be listed under the National List of Essential Medicines (NLEM).
Dr Chandra M Gulhati, editor, Monthly Index of Medical Specialities says, "The objective of the drug price regulation is that people should get quality drugs at affordable prices. Over the years, the number of drugs under price control has been steadily decreased from 347 (in 1979), to 142 (in 1987), 76 (in 1995) to just 74 currently (at least 20 molecules currently under the Drugs Price Control Order (DPCO) are hardly being used - such as captopril, chlorpromazine, phenylbutazone etc). But for a legal stay granted by the Karnataka High Court, the number would have come down to just 34 as per the Pharmaceutical Policy (2002). This corresponds to less than 5% of all major molecules in India. Therefore, there is an urgent need to enlarge the scope of the DPCO."
The Supreme Court had in a directive set aside the national pharmaceutical policy in 2003 and asked the government to formulate appropriate criteria to bring all essential and life-saving medicines under price control. Under pressure from the pharmaceutical industry, the government has been dragging its feet on this issue for several years. 
 S Srinivasan, managing trustee, LOCOST, Baroda, told Moneylife, "I hope it is true - we have had several false alarms in the past - and one hopes the move does not stumble at the legal level or breaks down because of some anti-price regulation voices in the Cabinet. Any such move also needs to be accompanied by clearer powers to the NPPA. NPPA must itself modify its price ceiling methodology to something simple and transparent; and most importantly as recommended by the Pronab Sen Committee, any irrational fixed dose combination of these single ingredient drugs should have the same ceiling price." LOCOST (Low Cost Standard Therapeutics) is a non-profit organisation that makes essential medicines and sells them at affordable prices.

NPPA is an autonomous body attached to the ministry of chemicals and fertilisers, but needs to refer nearly all cases to the ministry before issuing orders. Critics say that if a medicine comes under price control, the company adds another ingredient and takes licensing approval to market it as a new product.

RP Yajurvedi (Rao), president, Society for Awareness of Civil Rights (an NGO based in Mumbai) said, "This is a welcome step from the ministry and has been long overdue. It should be proactive to implement the proposal. This breaking news will obviously have drug companies lobbying to scuttle the proposal."
Dr Gulhati said, "This is very vague news. Such a move has been on and off for many years. It is not so simple a matter. Moreover, the ministry of chemicals is not the sole entity to decide. What about the ministry of health? What about the Group of Ministers under Sharad Pawar? What about the pending case in the Supreme Court? Currently, the post-manufacturing mark-up is 100% under DPCO. Will the same yardstick be applied to all new entrants into the DPCO regime? If so, the domestic industry will close down. The mark-up will need to be hiked to at least 300%."
Clearly it is a long battle and a lot will depend on the lobbying power and clout of the pharmaceutical industry, which is bound to pull out every stop to prevent an expansion of the price-control list



R P Yajurvedi Rao

7 years ago

have just come across some information about a drug caled Plavix (generic Clopidogrel) of Sanofi Aventis which is manufactured in France and imported in India and sold at an exorbitant price of over Rs. 1600 for 14 tablets. The Indian equivalent is available for as less as Rs. 40 for 10 in some cases and the higher end product costs Rs. 112 for 10 tabs which is several times cheaper.

The questions to ask are:

1. Why is India permitting imports of Drugs which are locally made?
2. Why is India allowing locally manufactured cheap drugs if their quality is suspect?
3. Other countries ban importation of products once they are manufactured locally. Even the underdeveloped African countries have this policy.

Maybe you could incorporate this information in your article.


7 years ago

Yes I found it . K Madhu did not give any different info. Mr Pravin Manker sent letter to us last week which has been redrafted by our society and the Ministry is at centre is asked to examine . We will forward you the same.




kallara Madhu

In Reply to RPY Rao 7 years ago



7 years ago

The comment of Mr K Madhu is not found in the link. sent to me Would you care to send in again for my review.

Kallara Madhu

7 years ago

many a times these types of news come. But the govt do not have the political will to reduce the price of brands. how can a prudent society digest the variation price of amoxicilin 500 mg from Rs 9 to Rs2.
what is the govt doing aganst this.
ur article is good.


7 years ago

This is a good move and should get transfered in to action. Drug prices are going up and common people can not afford to purchase. All essential and rational drugs should come under DPCO

R P Yajurvedi Rao

7 years ago

Good Article : Comments
All National and multinational companies have minted money at the cost of conbsumer because of continued apathy of the Government and its lobbyists. To my memory not a single company has cloased down because of price regulation. Even in Peak DPCO 1980s. So let us not apprehend what will hapen to whom. Let the Drug Companies submit cost of Mfr and Distribution and with profits it should be allowed.

No deadline for panel's makeover: Montek

Arun Maria, a member of the Commission, was recently asked to come up with recommendation regarding restructuring the panel to give it a new look and profile for ensuring better results

The Planning Commission today said it has not set any time frame for converting itself into a 'System Reforms Commission', a proposal aimed at better reflecting the changing economic profile of the country, reports PTI.

"I have not set a time frame on it," Planning Commission deputy chairman Montek Singh Ahluwalia told newsmen when asked about the body taking a new avatar as the Systems Reform Commission by 2012.

Denying reports that Prime Minister Manmohan Singh has Okayed the proposal for converting the Commission into Systems Reform Commission, Mr Ahluwalia said, "At the moment we don't have any specific proposal from Arun Maria (for restructuring of the body)."

Mr Maria, a member of the Commission, was recently asked to come up with recommendation regarding restructuring the panel to give it a new look and profile for ensuring better results.

Mr Ahluwalia said, "He (Maria) will come back to the internal Planning Commission and then we would take a view.

Then it would go to the prime minister, or may be it will go to the full Commission. Mr Maria has been asked to do something.

We have to wait and see what he does."

Mr Maria, on his part, had said earlier this month that four components would be involved for converting the Commission into Systems Reforms Commission. These include bringing about economic growth and a sustainable environment, involving more people in inclusive growth, and addressing issues related to governance.

Mr Maria had also said the process of revamping the body "is an ongoing" one without any particular timeframe.


Nova Medical Centers in joint venture with Max Healthcare

Nova Medical Centers, a specialised day care surgery centre chain said it formed a joint venture with Max Healthcare Institute Ltd (MHC) to expand the reach of its day care surgery in the National Capital Region. MHC will hold a 31% stake in the joint venture, titled as Nova Medical Centres NCR Region. There is no word on the rest of stake holding.

The JV with MHC will provide Nova with a reputed partner for all additional procedures that are typically not undertaken at Nova such as major surgeries including cardiac, obstetrics, organ transplants, emergency/trauma care, overnight stay, and advanced diagnostics like MRI and CT, it said in a release.

In a day care surgery, patient is admitted for investigation or surgery on a planned, non-resident basis. Internationally, almost 70% of all surgeries are conducted as day care surgeries, and this trend is on the rise in India as well.


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