Drug Pricing Will Get Stringent, But Will Not Be 'Unfriendly' To Pharma Industry: NPPA Chief

Drug Pricing Will Get Stringent, But Will Not Be 'Unfriendly' To Pharma Industry: NPPA Chief

MUMBAI, 22 JAN 2018:  The drug pricing regulator may be “perceived” as being unfriendly to the pharmaceutical industry, but that may not be entirely true, observed Bhupendra Singh, Chairman of the National Pharmaceutical Pricing Authority.


Pointing to data that NPPA had on medicines and the more recent cases of exorbitant hospital bills, Singh said that a section of the industry showed distorted prices and trade margins.


While 75 per cent of the ₹1 lakh crore-plus industry did not show such behaviour, the remaining had “played too much,” he said, referring to the varying margins on the same product. In the recent cases of exorbitant hospital bills, for example, he said, products were seen to have 1000 per cent plus margins.


A market price-based formula to cap medicine prices would be good, if the prices were not “distorted” in the first place.


At present, the Supreme Court is in its last leg of hearing a case on this issue, with healthcare advocacy groups calling for a cost-of-production based formula to cap medicine prices.


When there is freedom to price a product, use it in the best interest of the consumer, Singh told industry representatives at a conclave of the Indian Drug Manufacturers’ Association.


It is unfortunate that in healthcare, patients are treated as customers he said, urging the industry to distinguish between patients and customers.


Given this backdrop, he said that the pricing regime was set to get more stringent for the pharmaceutical industry. Presently, all drugs on the government’s National List of Essential Medicines are under the government’s price control mechanism.


But that said, Singh agreed that price control should not be the only approach to tackle the country’s healthcare challenges. Government too, needed to increase its spending on healthcare, he said.


In fact, contrary to the industry perception that the NPPA played only an adversarial role, he called for a Technology Upgradation Fund to help small units adhere to Current Good Manufacturing Practice (cGMP) norms.


The pharma industry too, has to evolve to the next level of value-added products, he said, citing the example of the infotech industry that has moved up the value chain.Hindu Business Line