India's drug-pricing authority drops price caps on nonessential drugs
- India's National Pharmaceutical Pricing Authority (NPPA) has regulatory authority over the maximum retail price of all drugs in the country. The agency maintains a list of essential drugs that are price capped -- the National List of Essential Medications (NLEM). Approximately 30% of all drugs are on the NLEM.
- A provision in the 2013 Drug Price Control Order expanded NPPA’s price capping authority to include nonessential drugs. In July, the pharmaceutical industry in India and worldwide was shocked when the NPPA invoked the provision in order to instill price caps on nonessential drugs.
- Industry groups, such as the Indian Pharma Alliance and the Organisation of Pharmaceutical Producers of India (OPPI) responded aggressively, taking legal action against a move it considered unfair. Now, the NPPA has listed a notice on its website saying that those expanded guidelines "are hereby withdrawn with immediate effect" -- although that doesn't seem to affect the caps imposed back in July.
In July, BioPharma Dive covered responses to NPPA’s cost-capitation policies, as well as the NPPA’s rationale for the move. Citing “extraordinary circumstances,” the NPAA augmented the list of NLEM medications and added nonessential medications to the list several days later.
Based on the NPPA’s policy, whenever the maximum retail price of a brand exceeds 25% of the sample average for that formulation, that drug can be capped at the 25% level. However, the Indian Pharma Alliance responded that there are always price differences between different brands. As a result, the alliance concluded that price caps would exist whenever there was more than one brand -- clearly an unsustainable situation.
In addition, OPPI asserted that capping nonessential medications goes beyond the mandate issued in 2013. Currently, the NLEM includes approximately 30% of all drugs available in India, including many diabetes and cardiovascular drugs. In September, NPPA added 36 drugs to the NLEM, bringing the total to 384 drugs. The ability of the industry to exert influence on unchecked regulatory authority -- including through the recent NPPA notice -- has evoked a cautiously enthusiastic response from industry groups.
- Pharma Times India drops price caps on non-essential drugs