The central government is planning to revise the current price regulation mechanism for medicines and medical devices sold in India.

The Ministry of Fertilizers and Chemicals has constituted a committee of top officials and special invitees from the pharmaceutical industry to suggest ways to reform the pricing framework for medicines and medical devices. In a directive on March 12, the ministry said that the secretary of the Department of Pharmaceuticals (DoP), chairman of National Pharmaceutical Pricing Authority (NPPA) and senior economic advisor in DoP will be the three core members of the committee. The two special invitees to the committee representing the industry are the secretary general of Indian Pharmaceutical Alliance and CEO, Indian Drugs Manufacturers Association.

One of the key agenda before the committee will be to design a price moderation framework for emerging and precision therapies to facilitate their timely reach to the needy patients.

The other terms of reference of the committee include institutional reforms within the NPPA, suggest ways to balance price and availability of essential medicines, while providing incentives to the industry to sustain growth and exports and recommendations to design a price moderation framework for medical devices, while providing incentives to the industry to sustain growth and minimize imports.

The government has asked the committee to draft a new Drugs and Medical Devices (Control) Order to achieve the above objectives. The committee has to submit its report in three months.

Currently, prices of medicines and medical devices that are notified as drugs are fixed by NPPA as per the provisions under the Drugs (Prices Control) Order, 2013 (DPCO-2013). The National Pharmaceutical Pricing Policy (NPPP) 2012, which led to the notification of DPCO-2013, had done away with an earlier ‘cost based’ pricing under the Drug Policy, 1994 to ‘market based’ pricing.

At present, the National Pharmaceutical Pricing Authority (NPPA) fixes the ceiling price of all scheduled formulations appearing in National List of Essential Medicines (NLEM). All the manufacturers of these drugs are required to sell their product equal to or lower than the ceiling price. Further, NPPA monitors the prices of non-scheduled drugs so as to ensure that the increase in their Maximum Retail Price (MRP) is not more than 10% of what was prevalent during the preceding twelve months.

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