In a developing economy of India, there is a range of people who can be very rich and very poor, the living background on geographical location also have an influence on economic classification of the people across the country. The input of the education propelled by exposure to mass media has given an interest to push the people from lower economic class to middle class, and upper middle class. The economic growth is penetrating in various under developed families and are becoming not only self sufficient but also progressive, irrespective of economic background. Which are poor, requires quality medicines for the management of the diseases. The prices of the medicines are an important aspect of therapeutics which has profound influences on the accessibility and compliance. A medicine prices are important as for the management of health care system in a country where 90 per cent of the public pay for the medicine out of their pocket and are taking the ownership of healthcare expenditure. The price of the medicine plays an important role for patient compliance.
The people who have limited resources, finds hard to decide upon whether to pay for medicine or to pay for food. Most of the lower economic background families are from the unskilled labours with poor educational background. They largely depend on the government hospitals and charitable trust hospitals for buying medicines.
The medicine prices are fixed by the manufacturers based on the demand and supply rule marketing practices creating demands. The open competition from market side plays an important role on deciding prices of the medicine. The pharmaceutical industry takes the advantage of fixing the price of that product which is of interest of industry. The government after careful consideration of the impact of free pricing policy of medicines, quickly enacted the first DPCO 1995 in the sub chapter of D&C Act 1940. After several years of experience there are several amendments and provision created by government to effectively keep the price tags of medicine so that, the poorest of the poor can also afford the essential drugs.
The list of medicines under DPCO is given a notification in which MRP is fixed. It is also illegal if, the prices of the medicines are sold at a higher price fixed by the government. There is a national drug pricing authority came into establishment under DPCO Act 1953. There are many violations for this rule now and then; the government is giving orders to the pharmaceutical industries to pay back the money which was collected in access by the public in government for example:
Cipla continues to be the biggest defaulter in price violation cases owes more than Rs.1,885 crore to the government. After the company dragged the NPPA to the court in 16 cases and the DoP in one case. After the DPCO was announced in 2013 the company continues to overcharge some of its products. The NPPA issued notice to the company with a claim of Rs.105 crore for overcharging cipro injection and ciplox at higher price than what was fixed.
GSK’s attempt to overcharge paracetamol preparation is yet another well known case of violation of DPCO.
The medicine prices are expected to be high when it is introduce to the market for the first time and remain higher till the patent expires. The generic medicines are usually low price and suddenly the price of the medicines shall become cheaper in due course. Due to multiple competitors, the price would become stabilize. However, on the contrary this trend gets subverted.
DPCO gives the authorization to NLEM to fix the prices if drugs based on new market based values. The prices of 652 drugs are controlled by DPCO, which are 74 before. DPCO facilitates the government to support the indigenous research and development of new drugs by providing patent to the innovations.
To keep a check on prices of essential medicines, the government has brought 52 new drugs under its price control mechanism including some commonly used painkillers and antibiotics, as also those useful in treatment of cancer and skin diseases. Following the latest move, more than 450 drug formulation packs are now under the price control mechanism of the NPPA, which entails the regulator fixing ceiling and retail prices for such medicines. In past year, the bulk drug formulations that have been added to the controlled list include those containing paracetamol, glucose, amoxycilline, diazepam, Codeine phosphate, ciprofloxacin, losartan and diclofenac. Earlier in September 2014, NPPA had capped the prices of 43 formulation packs including drugs such as antibiotic ciprofloxacin, BCG vaccine and anti-diabetic metformin. In last year July also, NPPA had reduced the prices of some of the key medicines and had fixed the price of 108 non-scheduled formulation packs of 50 anti-diabetes and cardiac medicines. The NPPA 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. The NPPA 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. The NPPA, which has the mandate to regulate prices of essential medicines, recently notified the new price ceilings for these medicines recently in this year. This will cause vast differences in the healthcare of patient. As the essential medicines are going to be selling at a low cost, this can firm the patient to get the health care expenses with their economic condition.
In its latest order, the NPPA has also said if any medicine is priced lower than the ceiling fixed by the regulator, then companies selling such drugs should maintain the existing or lower retail price.
The regulator also mandates that in case of launch of new variants of these medicines, with different packaging, dosage or strength, companies selling them will have to seek prior government approval. The idea is to ensure that companies do not tweak medicine composition or packaging to circumvent price control. The regulations also prohibit pharmaceutical companies from discontinuing or reducing production of these medicines. If any company wants to do so, it will have to seek six months prior approval from the NPPA, the official order said.
These norms are aimed at safeguarding consumers' interest, an official said. The NPPA directly regulates prices of 348 formulations. Though the pricing authority keeps a tab on all other drug prices as well, it allows a 10% annual hike on all such drugs, beyond which companies are required to seek its permission.
The government is now also planning to review the NLEM, based on which price regulation is decided. Addition of more medicines in the list based on how often they are prescribed will expand the span of price control in the country.
(Anantha Naik Nagappa is with Department of Pharmacy Management, MCOPS, Manipal 576 104 and Ruchika Sharma, Ruchi Bokolia are with KBIPER, Gandhinagar, Gujarat 382 024)