DPCO-Amendment Order 2019: What Industry says

Industry concerned over DPCO-Amendment Order 2019 not in line with "Make in India' mandate


The pharmaceutical industry in the country has raised concern over the Drugs Prices Control Order (DPCO)-Amendment Order 2019 not in line with ‘Make in India’ mandate and indigenous research and development (R&D). It has termed it as a retrograde step impacting domestic drug manufacturing.

According to an industry representation to the Department of Pharmaceuticals (DoP), “This DPCO- Amendment Order 2019 seems to retrograde as the “Make in India’ mandate for producing the drug in India and also developing it through indigenous R&D is completely negated.

This will encourage patent holders to market the drug in India only almost at the end of patent expiry to extend the patent life. The amendment as notified does not provide any incentive for early launch of internationally patented drugs in India and the innovator in this case may delay application for regulatory approvals in India to their commercial convenience.”

The industry has argued that if this amendment is meant to encourage latest patented drugs to be made available to Indian patients then the exemption for price control for patented drugs must be from the date of first marketing anywhere in the world, to be launched in India simultaneously, and not from the date of its commercial marketing by the manufacturer in India. Otherwise, this will discourage indigenous manufacturers from conducting R&D on innovative dosage forms and novel drug delivery systems (NDDS).

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“As these drugs will be out of purview of DPCO 2013, there will be no control on price or accessibility. Further, Indian patients cannot afford the international price of the product, which will be the case, in case of pricing freedom. While in advanced countries, the insurance pays the cost, but in India, it is invariably out of pocket expense,” the industry has cautioned.

The industry has also recommended that a separate pricing mechanism for patented drugs based on the concept of purchasing power parity will need to be set up for the five-year exemption to keep them reasonably affordable. This can encourage introduction of patented drugs but not at the same price.

Raising the same concern, it has stated that with reference to the amendments to DPCO- 2013 as a matter of policy and practice, amendments to an existing policy or rules are issued as draft rules to allow stakeholders to provide comments and suggestions and after suitably considering the suggestions the final gazetted notification is issued to ensure balanced implementation by all stakeholders.

DoP had issued a gazette notification on January 3, 2019 stating, “In exercise of powers conferred by section 3 of the Essential Commodities Act , 1955 (10 of 1955), the Central Government hereby makes the following order further to amend the Drugs Prices Control Order (DPCO)- 2013.

This order may be called the DPCO Amendment Order 2019.

To download the DPCO amendment order 2019, click here

In paragraph 32 that provides exemption from application of the order, sub paragraph (i) is substituted as “(i) manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970), for a period of five years from the date of commencement of its commercial marketing by the manufacturer in the country.

The industry has welcomed the proposal and has said that however orphan drugs will need to be defined under DPCO -2013.

The provision is intended to increase and improve accessibility, especially of drugs for treating orphan diseases etc. In the short term, affordability may be hit unless alternate medicines are put in place. However, accessibility and affordability could improve substantially in the long term.

Also this amendment should be extended to include rare and tropical diseases to encourage R&D and manufacturing of drugs for such essential requirements.

The need of the hour is a stable pricing policy that allows industry to plan ahead. This will ensure better implementation of DPCO provisions amongst the manufacturers, the trade and the government authorities thus improving availability, affordability and accessibility of drugs for domestic patients.

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