Indian government to face court challenge over drugs price cap issue
Sudden reversal of the National Pharmaceutical Pricing Authority's position leads to confusion among drug companies and consumers alike
India's Supreme Court has agreed to hear a petition challenging a recent government circular that did away with price caps on at least 108 drugs crucial to the treatment of diseases such as cancer, tuberculosis and diabetes.
The issue has been going back and forth for a long time. On 22 September the National Pharmaceutical Pricing Authority (NPPA) withdrew a May 2013 circular that capped the prices of certain non essential drugs, in line with a directive from the Ministry of chemicals and fertilisers. Earlier this year, the NPPA came out with guidelines that gave it the authority to regulate drug prices. In a surprise move on 10 July the organisation invoked a rarely used clause of Paragraph 19, that allows price control outside of the list of essential medicines in extraordinary circumstances.
On that date it capped the prices of 108 cardiac and diabetes drugs, invoking Paragraph 19 of the Drug Price Control Order, thereby extending price control to drugs outside the National List of Essential Medicines (NLEM). Pharmaceutical lobbies had contested the NPPA order in the Bombay High Court.
The provision authorises the NPPA 'in extraordinary circumstances, if it considers necessary so to do in public interest, to fix the ceiling price or retail price of any drug for such period as it deems fit'.
The notification to fix the prices of these medicines, which are non scheduled formulations, was issued wherever the maximum retail price (MRP) of the brand of a particular formulation exceeded 25% of the simple average price, and the same would be capped at the 25% level.
'NPPA was allowed to initiate the process of fixing a price cap if the price of a drug brand exceeded the simple average price in that therapy group by 25%, or the price at which a new drug was launched for the first time was higher than the most expensive brand existing in the group,' said Mahesh Solanki, pharmaceutical analyst.
The drugs that were affected included Gliclazide, Glimepiride, Sitagliptin, Voglibose, Amlodipine, Telmisartan and Rosuvastatin, Heparin and Ramipril, among several others. These drugs had witnessed a price reduction from 10-15% to as high as 35%, with the average reduction around 12%. However, on 22 September the NPPA withdrew its disputed guidelines on the basis of which the drug regulator had initiated price control of 108 non scheduled formulations. Officials held that the order was to cap prices of a list of 108 cardiovascular and diabetes drugs, not part of NLEM, and that it had created an uproar from the industry leading to lawsuits contesting the order.
Market sources said the order withdrawal would be a huge relief for companies like Sanofi, Abbott, Zydus Cadila, Ranbaxy, Lupin, Sun and Cipla, which have a large presence in diabetes and cardiovascular drugs.
In a public interest case to be heard by India's Supreme Court, it was claimed that the 22 September circular was against the public interest, as it would place drugs crucial to treating diabetes, blood pressure, cancer and even rabies beyond the reach of the common man.
A Central Bureau of Investigation inquiry has also been demanded by the petitioner, into 'the sudden turnaround' in the NPPA's action, which has left patients and drug companies confused.
