0.1624
900 319 0030
x

Drugs (Prices Control) Amendment Order, 2019

iasparliament Logo
January 05, 2019

Why in news?

The Ministry of Chemicals and Fertilizers has recently released the Drugs (Prices Control) Amendment Order, 2019.

What is it for?

  • Drug price control is all about striking the right balance between consumer and producer interests.
  • The DPCO (Drugs Prices Control Order) fixes the prices of scheduled drug formulations.
  • It also monitors maximum retail prices of all drugs, including the non-scheduled formulations.

What are the key provisions in the recent order?

  • A drugmaker who has brought in an innovative patented drug will be exempt from the price control regulations for 5 years from the date of marketing.
  • The Drug Price Control Order (DPCO), 2013, has been amended to this effect.
  • The amendments were made on the basis of the NITI Aayog’s recommendations to the Department of Pharmaceuticals (DoP).
  • Drugs for treating rare or “orphan” diseases too will be exempt from price control, with a view to encouraging their production.
  • Under the amended DPCO, the Centre will continue fixing prices in line with market-based data available on drugs.
  • The source of market-based data shall be the data available with the pharmaceutical market data specialising company as decided by the government.
  • If the government deems it necessary, it may validate such data by appropriate survey or evaluation.
  • [Alternatively, cost-based pricing model takes into account the actual money that went into developing the drug, sourcing the raw material and so on].

What are the concerns?

  • The changes are aimed at lifting foreign investor sentiment, particularly of US companies.
  • But not bringing orphan drugs into price control will significantly impact patients.
  • Only MNCs are manufacturing orphan drugs at the moment; so lack of price control will have a detrimental effect on affordability.
  • Also, cancer drugs are increasingly patented with no generic competition, putting them out of the reach of poor patients.

What should be done?

  • Medicines account for over half the costs of inpatient care and 80% in the case of out-patient care.
  • So, there must be a way of ensuring that their prices remain accessible without producers feeling disincentivised in the process.
  • The Competition Commission of India’s recent report identifies retailers’ margins as a major cause of high prices.
  • This can best be addressed by investing in wholesale public procurement, as Tamil Nadu and Rajasthan have shown.
  • A combination of State-led insurance, such as Arogyashree in Andhra Pradesh, and public procurement can help keep health costs down.
  • All these essentially require increasing the budget allocation for the health sector.

 

Source: Financial Express, BusinessLine

Login or Register to Post Comments
There are no reviews yet. Be the first one to review.

ARCHIVES

MONTH/YEARWISE ARCHIVES

Free UPSC Interview Guidance Programme