Mala Fide Decision on Drug Prices

The decision of the Government of India to withdraw the power of the National Pharmaceutical Pricing Authority (NPPA) to set price controls on drugs that are not on the National List of Essential Medicines (NLEM) raises questions on the Narendra Modi regime’s commitment to people’s welfare. One must ask if this government is more concerned about being responsive to the needs of industry and foreign governments.

The DPCO (Drug Price Control Order) 2013 put 348 drugs in the NLEM 2011 under price control. The problem, however, is that this order applies to less than 15% of the Rs 80,000 crore domestic pharmaceutical market, and leaves out several life-saving drugs because they are not in NLEM 2011. Cardiovascular conditions affect 10% of India’s population and are responsible for 25% of the deaths in the age group 25-69, and one in every 20 Indians has diabetes. Yet, until July 2014, only 15% of the antidiabetics market and 29% of the cardiovascular market were under price control. This is an extraordinary situation for any country and is indeed a public health crisis. DPCO 2013 gives powers to the government to meet precisely these kinds of extraordinary circumstances. The NPPA, the body of pricing experts under the Department of Pharmaceuticals (DOP), is mandated to look into such situations. Para 19 of the DPCO states: “…the Government may, in case of extraordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any Drug for such period, as it may deem fit…” In July 2014 in a series of well-argued 50 orders, the NPPA put 108 drugs, mostly antidiabetics and cardiovasculars, under price control. These orders were preceded in May 2014 by internal guidelines, which elucidated the extraordinary circumstances at play.