A proposal to dismantle National Pharmaceutical Pricing Authority (NPPA), the price control machinery for pharmaceuticals in India, is being discussed by the government and Niti Ayog officials as per reports in a section of the media. These reports have not been denied by the government as yet giving credence to such a decisive move. The reports said that two consultations in October and November were attended by officials from the departments of health, pharmaceuticals, industrial promotion, commerce and Niti Ayog. At the same time, none of the NPPA officials were attended these meetings. The move is to wind up NPPA and entrust authority to regulate drug prices with the department of pharmaceuticals. There has been repeated representations from the various industry bodies in the past to do away with the price control in pharmaceutical industry as pharma companies were alleging that their profitability has been getting seriously affected because of price regulation. The ongoing disputes between the large pharma companies and NPPA over price fixation is a result of this confrontation. Currently the prices of 384 drugs selected from the National List of Essential Medicines (NLEM), are fixed by NPPA as per Drug Price Control Order, 2013. And the current value of domestic pharmaceutical market is estimated to be worth Rs. 1 lakh crore.
NPPA was established by the Union ministry of chemicals & fertilizers in 1997 with the objective of regulating and fixing prices of essential and life saving drugs in the country. But, violation of the DPCO provisions by several pharmaceutical companies became a serious challenge to NPPA especially after the notification of DPCO,1995 covering 74 drugs and their formulations. DPCO was modified subsequently and the new DPCO was notified in 2013 to include more drugs under the ambit of price control in the wake of the changed disease profile of the country. Pharma companies have been flouting the price fixing orders of NPPA and overcharging the patients for the last 20 years or more and refused to pay back the overcharged amounts to the government as most of the cases are in different courts. As per the latest figures, NPPA has to collect a total sum of Rs. 4,551 crore from various pharmaceutical companies up to February 2016 for overcharging of drugs from 1995. It is unfair to consider this is a failure of NPPA. This is because the government has not given any enforcement powers to the authority from the very beginning. What is needed is the empowerment of this body without any delay. Price control on essential and life saving drugs is necessary in a country like India with a large majority of the population being poor and sick. Industry lobbies and their agents may advocate such a proposal as their sole motive is to maximize profit at any cost. This needs to be resisted by the government as otherwise there could be a flare up in prices of most of the essential medicines. Prices of hundreds of patented drugs are already outside price control and pharmaceutical companies are pushing their sales in the country with the support of medical practitioners.