Pharmaceutical Drugs Prices in India

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India has succeeded in bringing the pricing of essential drugs under control. However, pharmaceutical companies follow the prices of developed countries for the sale of patented drugs, which makes them considerably expensive in India.

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India’s pharmaceutical industry, driven by knowledge, skill, a profitable manufacturing base and high quality standards, has grown rapidly over the past two years. Indian industry is the 3rd in the world in terms of volume and 14th in terms of value. The lower ranking in value is due to the fact that Indian drug prices are among the lowest in the world. However, despite this, drug costs continue to be an important component of overall health spending in the country. The majority of pharmaceutical expenses are borne by individuals in India, unlike the reimbursement of pharmaceuticals by public or private insurance companies in developed countries. In this regard, it is imperative that the government have a mechanism to make the pricing of essential medicines fair in India.

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Drug price controls were first introduced in the country after the Chinese aggression with the promulgation of the 1962 Drug Ordinance (price display) and the 1963 Drug Ordinance (control prices). With these orders, the prices of drugs were frozen from April 1, 1963. Subsequently, a series of price control regimes were notified through various decrees in the country from time to time on the basis of different principles, in which the duration of the price control as well as the nature of the price control varied from one order to another.

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The government is seized with the goal of enabling the industry to grow while balancing the stated goal of providing better health care, including making essential medicines available at reasonable prices for all. To achieve the stated goal of providing affordable medicines, the government has set out the “National Pharmaceutical Pricing Policy 2012” (NPPA 2012).

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The national pharmaceutical pricing policy seeks to be limited to the objective of promulgating the pricing principles for essential drugs as defined in the “National List of Essential Medicines – 2011” declared by the Ministry of Health.

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Key principles of the national pharmaceutical pricing policy 2012

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NPPA success story so far

The lower prices were applauded by end users who saw prices drop significantly in some cases. In response to a question in parliament earlier this year, the Minister of State for Chemicals and Fertilizers shared the following statistics on drug price cuts.

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Total drugs covered by the 2013 DPCO for price control: 628 drugs

Fixed ceiling price: 509 drugs

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Price reduction for 509 drugs Â

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Obviously, the introduction of price controls has served its purpose in benefiting patients and will save hundreds of crores every year.

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Price of drugs not included in the NLEM:

Pharmaceutical companies (generics / innovators) are free to set the price of drugs not included in the NLEM on the basis of their own commercial evaluation.

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Nevertheless under Article 19 of the DPCO, “The government may, in extraordinary circumstances, if it deems it necessary in the public interest, fix the ceiling price or the retail price of any drug for such period as it considers appropriate and when the price ceiling or retail price the price of the drug is already set and notified, the government may authorize an increase or decrease in the ceiling price or the retail price, as the case may be, regardless of the annual wholesale price index for that year ”.

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The NPPA made a bold move in July 2014 to cap the prices of 108 drugs that were not included in the NLEM. These drugs were intended for the treatment of cardiovascular disease, diabetes and HIV. This decision was strongly opposed by the pharmaceutical industry and due to intense pressure from the pharmaceutical companies, the government subsequently withdrew the guidelines for price control issued under paragraph 19 of the price control order. drugs for drugs outside the NLEM. This was a blow to the NPPA / government efforts to cover drugs outside of the NLEM for the benefit of the general public.

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Prices of patented medicines in India

As we have seen above, the government has succeeded in bringing the price of essential drugs under control, which has benefited the Indian masses. However, most of the recently launched patented drugs fall outside the scope of the NPPA, as the drugs are not part of the NLEM. Thus, innovative companies are free to set the price of patented products in the market according to their own business goals and in most cases the pricing of patented products in India follows that of developed countries, which makes these drugs significantly more expensive than the standards of care existing in India.

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Under the DPCO decree of July 2014, in which 108 drugs not included in the NLEM were covered; the list also included a patented drug, namely sitagliptin from Merck, which was slightly reduced in price from Rs 42.7 to Rs 41.8 per pill. Although the reduction was by no means significant, it was a step in the right direction to also introduce innovative drugs under the NPPA. However, questions have also been raised about the innovative drug pricing decision process in India. As previously mentioned, the DPCO order of July 2014 was subsequently withdrawn and an opportunity to cover patented drugs under the NPPA was lost.

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Although there is no clear path in India to decide the price of patented medicines based on the efficacy / additional benefits of the patented medicine over the existing standard of care, Western countries are now closely evaluating the additional health benefits of a new drug before deciding on the price of a newly launched drug. This is important because governments reimburse pharmaceutical expenses in many Western countries, and with shrinking health budgets, payers in those countries assess profit data before deciding on the reimbursement price of a newly launched drug.

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In the next part, we will take a closer look at the price approval system in Germany where the country has adopted new guidelines for deciding the price of new drugs and we will share with you an example of a diabetes drug that was removed from German. marketed by an innovative company because they couldn’t get the price they wanted (because they couldn’t prove an additional advantage over the existing treatment) but is selling like hot cakes in India. Can the Indian government take a lesson from Germany here to bring innovative drugs?

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(Sandeep Khurana is an independent consultant and researcher. The opinions expressed here are personal. He can be contacted at his twitter username @IQnEQ)

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