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Drug pricing powers: Need for demarcation of roles between regulator & govt, says FICCI president

Para 31 of the DPCO 2013 gives the Centre the power to review decisions of the National Pharmaceutical Pricing Authority (NPPA).

Written by Deepak Patel | Bengaluru |
February 12, 2017 2:13:37 am

Expressing concern over unpredictability in drug pricing control regime, FICCI president Pankaj R Patel, also the chairman and managing director of Zydus Cadila, said that there is a need for a clear demarcation of roles between the pricing regulator and the central government. “There is a need to consider by the government the widening of scope of power to reduce (prices). I think there is a need to be clearly understood differentiation between a regulator and the government. Regulator is not a government. Government is a government. And, I think that clear definition and clear demarcation has to happen and that is what we need to ensure so that going forward, we have smooth working environment,” Patel said while addressing the ‘India Pharma 2017’ exhibition in Bengaluru on Saturday.

Para 31 of the DPCO 2013 gives the Centre the power to review decisions of the National Pharmaceutical Pricing Authority (NPPA). Generally, the reviewing authority under this Para is an under secretary of the Department of Pharmaceuticals (DoP). The NPPA works under the DoP, which comes under the Ministry of Chemicals and Fertilisers.

Nirmala Sitharaman, commerce and industry minister, responded: “I think FICCI (president) should not put it as a demand — I have no objections, of course they can — but convey the message and the intent to this government through his good office and his association members (so) that the industry prospers through consultations with the state and the central government. The intention of no government — state or the Centre — is to become too much of a regulator that you are not able to survive and do your business. So, that clarity should exist in all our minds.”

Patel also raised issues regarding transparency in the NPPA saying that the DoP should encourage the price regulator to develop standard operating procedures (SOP) so that it can discharge its functions in more transparent and predictable manner. “Every day, you read in newspapers something new for the industry — it is something we feel very much kind of an unstable environment. And, we need to take a decision once for whatever it may be and then we can go ahead and plan our future as we need to,” he added.

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Ananth Kumar, minister of chemicals and fertilisers, said that in the last two and half years, the Centre is moving steadily towards transparency and predictability. “We are not changing the goalposts in two and half years. You are not in uncertain times in last two and half years. There was one aberration. When that aberration happened, I intervened and set it right. And, I assure you that stability will be ensured and that transparency is sacrosanct,” he added.

The “aberration” was a decision taken by the NPPA on May 29, 2014, where it decided to control the prices of 108 drugs — mainly for heart diseases and diabetes — which were not a part of DPCO, 2013 and were considered non-essential drugs. The NPPA then rolled back this order on September 22, 2014 as per ‘directions’ by the DOP.

“The industry fully supports the government to ensure that notified prices are implemented as per the provisions of DPCO, 2013. But various challenges exist in implementing their advised ceiling prices on pre-manufactured stocks,” Patel said. On this, Kumar said that he is also to take into consideration the view of various activists who believe that there has to be one price for a formulation at any given time. “All these considerations are there. Therefore, I think we will work on that. We will come with solutions — mutually agreeable solutions. We want the promotion of industry. We want your viability also,” Kumar added.

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(The writer is in Bengaluru on invite of FICCI and the Ministry of Chemicals and Fertilisers)

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