Reforming Drug and Medical Device Pricing: The Mission of Govt

Over the years, various government-appointed committees such as the Kelkar Committee, Pronab Sen Committee, and Sandhu Committee have influenced drug pricing policies.

The Health Master

March 13, 2024

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Last Updated on March 27, 2024 by The Health Master

Pricing

In a significant move towards enhancing accessibility and affordability of healthcare, the Department of Pharmaceuticals (DoP) has set up a Committee dedicated to reforming the pricing framework for drugs and medical devices in the country.

This initiative aims not only to regulate prices but also to ensure a balance between availability and affordability, while fostering growth and innovation in the pharmaceutical sector.

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Understanding the Committee’s Mandate

1. Introduction to the Committee

The Committee, spearheaded by Arunish Chawla, Secretary, DoP, comprises key stakeholders including Kamlesh Kumar Pant, Chairman of National Pharmaceutical Pricing Authority (NPPA), and Awadhesh Kumar Choudhary, Senior Economic Advisor, DoP.

Additionally, two representatives from the industry, one from the Indian Pharmaceutical Alliance (IP Alliance) and one from the Indian Drugs Manufacturers’ Association (IDMA), have been appointed as special invitees.

2. Objectives of the Committee

The primary objective of the Committee is to prepare a comprehensive draft Drugs and Medical Devices (Control) Order within a three-month timeline.

Key areas of focus include institutional reforms for the NPPA, designing a price moderation framework for medical devices, and ensuring timely access to emerging therapies for patients in need.

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3. Key Considerations

The Committee will deliberate on several critical aspects, including:

Balancing price and availability of essential medicines
Providing incentives for industry growth and exports
Designing a price moderation framework for medical devices to minimize imports
Facilitating timely access to emerging and precision therapies

Historical Context and Legislative Framework

4. Evolution of Drug Pricing Policies

The journey of drug price regulation in India dates back to 1962 when the country witnessed a surge in medicine prices due to external factors like war.

Subsequent legislative measures, including the Drugs (Control of Prices) Order, 1963, aimed to freeze drug prices and introduce price control mechanisms.

5. Impact of Government Committees

Over the years, various government-appointed committees such as the Kelkar Committee, Pronab Sen Committee, and Sandhu Committee have influenced drug pricing policies.

These committees proposed recommendations ranging from exclusion of certain drugs from price control to the formulation of trade margin regulations.

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6. National Pharmaceutical Pricing Policy (NPPP)

The introduction of the National Pharmaceutical Pricing Policy in 2012 marked a shift from cost-based pricing to market-based pricing, thereby aligning drug pricing regulations with market dynamics.

This policy laid the foundation for the Drug Price Control Order (DPCO), 2013, which further streamlined drug pricing mechanisms.

Current Challenges and Future Prospects

7. Addressing Healthcare Disparities

The Committee’s efforts towards reforming drug pricing hold immense significance in addressing healthcare disparities by ensuring equitable access to essential medicines and medical devices across socio-economic strata.

8. Promoting Innovation and Industry Growth

By providing a conducive environment for innovation and growth, the revamped pricing framework is poised to incentivize pharmaceutical companies to invest in research and development, ultimately leading to a more robust healthcare ecosystem.

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