The National Pharmaceutical Pricing Authority (NPPA) is preparing an action plan to equip the authority face the possible challenges arising out of the product patent era. The entire gamut of NPPA's functioning is undergoing a scrutiny. The exercise is meant to have in place a very effective drug pricing control mechanism, it is learnt. According to sources, the new chairman of NPPA is the man behind the whole exercise.

A review of NPPA's role and its capabilities to effectively carry out the functions assigned to it has become necessary as the patent system per se is guaranteeing the patent holder a monopoly in the market. Any attempt to fix the price of patented drugs may end up with problems, as the "profitability" is the only incentive for the companies who are exclusively marketing the products in the country. The NPPA will have to take up a negotiator's role in addition to the regulator's if it has to ensure the availability of drugs at affordable prices, sources informed.

The other problem that plagues NPPA is the absence of teeth when it comes to enforcement of DPCO provisions. With no infrastructure of its own at the state level, monitoring of drug prices is today an additional duty handled by the state drug control authorities. The central government will have to some out with special incentives for the state drug authorities for maintaining special DPCO cells in the respective departments for effective implementation of DPCO. The issue of high profit margins on generics is also to be handled by NPPA in an effective manner.

Sources hinted that the NPPA chairman is to suggest changes in the functioning of NPPA to the Ministry of Chemicals and Fertilizers in the coming months.

The NPPA was established in 1997 to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995. The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.