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Govt withdraws NPPA's power to cap non-essential drug prices

23 Sep 2014 Evaluate

In a bit of the relief to the pharmaceutical industry, the Department of Pharmaceuticals has withdrawn guidelines issued by it on May 29 which gave National Pharmaceutical Pricing Authority (NPPA) the powers to fix the prices of drugs that are not on the essential medicines list in response to a plea filed by an organization of drug manufacturers challenging the drug regulator’s July 10 notification that brought over 100 medicines under price control.

The industry, which off-lately has been baffled by the increasing number of medicines adding to the list of essential medicines, strongly protested against this matter of fixing price cap for non essential drugs. Despite this, reports suggests that the decision to withdraw the drug pricing authority's powers to fix the prices of non-essential medicines will be on a prospective basis, and will not affect price caps imposed in July on 108 drugs.

NPPA had taken the industry by surprise on July 10, when it invoked the rarely used clause of Paragraph 19, which allows price control outside of the list of essential medicines under extraordinary circumstances and imposed price caps on 108 non-essential drugs, which are used to treat diseases ranging from diabetes to HIV/AIDS. The move of price control was driven by huge inter-brand price difference seen in most drug categories. NPPA had used the term 'exploitative pricing' for such situations where medicines become unaffordable or hugely expensive for patients, in a market which pays out of pocket.

However, the industry bodies had taken representations to the government, opposing the order and pressure had been building up on the drug regulator. Both Indian drug lobbies Indian Pharmaceutical Alliance and MNC group Organisation of Pharma Producers of India had legally challenged the order in separate petitions, questioning the use of Para19 and NPPA's jurisdiction to carry out the order.

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