Price fixation of essential drugs has been a difficult exercise for the National Pharmaceutical Pricing Authority ever since price control mechanism was introduced in this industry. The main hurdle confronted by the NPPA in fixing the prices of drugs was the non availability of reliable cost and market data. This non availability of accurate data with the NPPA is the key reason for the unending disputes between the pharmaceutical companies and NPPA over price fixing. These disputes over price fixation have resulted in accumulation of thousands of unsettled court cases over the years with no immediate prospects of recovering the overcharged amounts from the companies. It is in the context of this situation, NPPA decided to set up an Ingredient Pharmaceutical Database Management System (IPDMS) in the country in September 2014 aimed at facilitating online submission of mandatory cost data by all pharmaceutical companies. A directive was issued at that time to all pharma companies to comply with the requirement with a deadline of one month. The objective of NPPA was to create an appropriate mechanism of obtaining market-based data related to all drugs marketed in the country. The launch of IPDMS was also felt necessary in the context of the transition from a cost based price fixing of controlled drugs followed until DPCO 1995 to a market data based price fixation under the DPCO 2013. NPPA initially has been sourcing the required market based data from IMS Health subject to necessary validation for fixing prices under the DPCO 2013. Whenever the data of IMS Health was not available or found to be inadequate, it used to get supplemented by sourcing market-based data from another specialized pharmaceutical data source.
Now even after two years of issuing direction for submitting data, several pharmaceutical companies are yet to provide data to NPPA. Only very few companies have provided data to NPPA despite quite a few extensions for the deadline during 2015 and 2016. Now the latest deadline for compliance was January 21 this year. Concerned over the poor response from the manufacturers, the NPPA has warned the companies of action for non compliance some time back. The failure to submit mandatory returns under the DPCO 2013 can attract penal action and NPPA can initiate prosecution proceedings under the provisions of the Essential Commodities Act. Pharmaceutical companies need to adopt this significant regulatory reform without any more resistance and delay in the interest of accurate price fixation of controlled drugs. And NPPA should not be granting any more extensions for the compliance of this order. Unless punitive actions are initiated against the non compliant companies, the goal of developing a pharma Data Bank can never be achieved in the near future. NPPA should not be having any more hesitation in this regard.