The civil society groups working in the health sector have called upon the government to expand the scope of price control by bringing other essential and life saving medicines under price regulation in order to protect patients from overcharging and to promote public health.

Supporting the NPPA's July 10 notification bringing 108 formulations under price control under Paragraph 19 of the DPCO 2013, the civil society groups said that this is a first step towards the institution of a robust, pro-public health policy of drug price control.

“We note that the earlier notifications for essential medicines excluded several dosage forms and strengths because they did not feature in the National List of Essential Medicines (NLEM), 2011. Thus the recent notifications were necessary to cover more of the strengths of medicines than that are listed on the NLEM. In addition, the notifications also covered medicines in the cardiovascular and diabetes therapeutic categories that are not included in the NLEM”, the NGOs in their letter to the Minister of Health & Family Welfare and the Minister of Chemicals & Fertilizers said.

Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The NLEM, a list of 348 rational and cost-effective medicines, is not the basis for production, promotion and prescription in India. In reality the most frequently prescribed and consumed medicines are not listed in the NLEM, the NGOs informed the government.

Terming the industry's claim of loss of revenue of Rs. 600 crore as misinformation, the civic society groups said that the NPPA’s action on the market will however be marginal, and nowhere near the doomsday predictions of the industry.  

It will affect only those brands that were selling at very high prices. We have analysed the impact of the notifications and found that the retail market of Rs. 77,526 crore (Moving Annual Total, June 2014) would experience a loss of  Rs. 350 crore (AIOCD-AWACS, PharmaTrac Data, 2014).  This represents a loss of approximately only 2 per cent (Rs. 112 crore) in the anti-diabetic therapy segment and 2.5 per cent (Rs. 238 crore) in the cardiac therapy segment. This in a way establishes the excess profits of the industry in those particular formulations by overcharging the patients, the NGOs said in their letter to the government.

The civic society groups further said that the market based price fixation being followed by the NPPA, a departure from the long used cost-based price control mechanism, is irrational and means that the ceiling prices are still very high. Many medicines are sold by reputed companies much below the NPPA ceiling price. The ceiling price of atorvastatin 40mg is Rs. 22.02 per tablet while Biochem Pharmaceutical is selling the same at a much lower price of Rs. 14.94 per tablet. The ceiling price of glimepiride 3mg is Rs. 10 per tablet, while Ipca Laboratories is able to sell it for Rs. 6.90 per tablet. As per our calculations only a little over one fourth of packs selling on the market will need to revise their prices downwards because they were originally priced higher than the notified price. This is evidence that there is a scope for significant reduction in NPPA ceiling prices, without affecting the reasonable profits of the industry.

We also note that the notifications have not included fixed dose combinations in the cardiovascular and diabetes therapeutic categories whereas the sales of many combinations exceed those of the single molecule medicines.

We also raise the argument that fixing of ceiling prices of all the other dosage forms of all medicines under NLEM cannot be neglected. Here again the same phenomenon of overcharging remains. NPPA should come out with similar action to cover all dosage forms and fixed dose combinations containing one or more medicines under NELM, and as well as bring other essential and life saving medicines under price control immediately, the civic society groups demanded.

The letter was signed by All India Drug Action Network (AIDAN), Jan Swasthya Abhiyan, Low Cost Standard Therapeutics (LOCOST), Medico Friends Circle, Third World Network- India, All India Peoples Science Network (AIPSN) and the National Working Group on Patent Laws.