Medicines costing less than Rs 5 per dose may be taken out of price control

Medicines costing less than Rs 5 per dose may be taken out of price control as the country’s National List of Essential Medicines (NLEM) is being updated, according to sources in the industry and government. 

If this goes through, drugmakers will have the liberty to raise the prices of these drugs by up to 10 per cent every year. 

The Standing National Committee on Medicine (SNCM), which is updating the 2015 list, is likely to meet early next week (starting November 4) to have a stakeholders’ meeting.

While around 19 per cent of the Rs 1.36 trillion domestic drug market is under price control, 4-5 per cent of it comprises drugs priced under Rs 5 per dose. One dose essentially means one tablet or capsule.

The industry has been pursuing this for almost a year, said an industry source. 

“In multiple meetings with the government, industry stakeholders have proposed that drugs under Rs 5 per dose be brought out of price control. There is enough competition in the market to keep the prices of these drugs under check,” said the managing director of a drug firm involved in the process. 

A government official involved in drafting the new NLEM confirmed this. 

“The industry has proposed taking drugs under Rs 5 per dose out of price control. This proposal is being considered at the moment,” the official said. 

Medicines on the NLEM are notified by the Department of Pharmaceuticals under the Drugs Price Control Order, 2013, following which the National Pharmaceutical Pricing Authority sets the maximum price at which drugmakers can sell them in India.

The important bit here is, for NLEM drugs, the annual price rise allowed is linked to the wholesale price index. However, for those outside the NLEM, the companies can take a price hike of up to 10 per cent annually.

The NLEM 2015 has more than 375 medicines, including medical devices such as stents. Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, the lobby that represents the leading pharmaceutical manufacturers in the country, said: “This low-priced segment has multiple brands and fierce competition ensures that no manufacturer can take a steep hike,” he said.

The NLEM is typically reviewed every three years. The SNCM, headed by Balram Bhargava, secretary, Department of Health Research, and director general of the Indian Council of Medical Research, has been holding meetings with industry stakeholders, including representatives of drug firms, industry associations, patient advocacy groups, and non-profit organisations.

The first meeting took place around June. The SNCM has sought industry feedback on cancer drugs, penicillin preparations, cardiology medicines, and also anti-microbial resistance. Prices of some key cancer drugs and diabetes and cardiology medicines may be cut.

Also, the list of antibiotics may be updated, taking out the ones to which the Indians have become resistant and adding new ones.
What’s the prognosis?
  • NLEM 2015 is being reviewed and scrutinised by Standing National Committee on Medicine
  • Industry proposed to take drugs under Rs 5 per dose out of price control
  • Centre considering this as it updates the list
  • 19% of Rs 1.36 trillion pharma market is under price control
  • Of this, 4-5% are drugs priced under Rs 5 per dose
  • Industry feels intense competition to keep drug prices in check
  • If brought out of price control, drug firms can raise prices by up to 10% annually

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