Pharma Industry urge NPPA to adopt Prospective Batch Pricing to reduce Overcharging

Last Updated on January 4, 2024 by The Health Master

Introduction: Prospective Batch Pricing

The Indian Drug Manufacturers’ Association (IDMA) is urging the National Pharmaceutical Pricing Authority (NPPA) to adopt prospective batch pricing as a solution to reduce overcharging instances and promote a business-friendly environment.

This move aims to address the challenges faced by pharmaceutical companies in promptly implementing revised prices for scheduled drugs.

Challenges with Immediate Price Implementation:

Industry experts argue that the immediate implementation of ceiling prices is impractical due to the complex network of over 9 lakh chemists in the country.

Pharma companies find it challenging to inform and coordinate with each retailer individually.

Even if a single retailer is found selling a product at a higher price, it can lead to overcharging notices, show cause notices (SCN), and legal complications for the pharmaceutical companies.

Prospective Batch Pricing as a Solution:

To mitigate this issue, IDMA proposes the adoption of prospective batch pricing. Under this system, the revised price would only apply to drugs manufactured after the notification, not to market stocks produced before the announcement.

This would provide a more practical approach, ensuring that pharmaceutical companies can implement price changes effectively.

Proposed Modification to the Drug Prices Control Order (DPCO) 2013:

IDMA suggests amending para 2(e) of the DPCO 2013 by removing the term ‘Retailer’ from the definition of ‘Dealer.’ The reasoning behind this recommendation is that pharmaceutical companies have no control over the prices set by retailers.

Presently, the DPCO 2013 defines ‘Dealer‘ as a person engaged in the purchase or sale of drugs, including wholesalers, retailers, and their agents.

Deliberations and Industry Support:

The issue of prospective batch pricing was discussed during a recent meeting between industry leaders, the Department of Pharmaceuticals (DoP) Secretary S Aparna, and NPPA Chairman Kamlesh Pant.

The Department of Pharmaceuticals also encouraged pharmaceutical companies to report instances of overcharging to the NPPA, emphasizing the need for policy interventions to address this concern.

Availability of Data and Simplified Implementation:

IDMA highlights that all pharmaceutical company data, including GST records and e-way bills, are officially documented.

As per the DPCO 2013, pharmaceutical companies submit their Form II, Form V, and Form III through the IPDMS 2.0 platform, which provides quarterly production and sales data.

Leveraging this existing infrastructure, prospective batch pricing can be seamlessly implemented, streamlining business processes and ensuring affordable medicines for all Indians.

Conclusion:

The implementation of prospective batch pricing in the pharmaceutical industry is a pressing issue that requires immediate attention.

By enabling this system, the Indian Drug Manufacturers’ Association (IDMA) aims to reduce instances of overcharging, simplify business operations, and ensure affordable medication accessibility for the entire population.

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