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