The price control noose is set to tighten on the Indian pharma industry. Even as the National Pharmaceutical Policy is contemplating putting 354 essential drugs under price control, the government would be creating state-level price control cells to comb the entire country more finely for cases of violations.
Also, prices of drugs outside the price control umbrella would to be monitored.
Currently, a provision in the Drug Price Control Order empowers pharma watchdog National Pharmaceutical Pricing Authority to step in if the price rise of any drug exceeds 20 per cent in a year.
The Department of Chemicals & Petrochemicals is looking to reduce this threshold limit to about 15 per cent or so. This implies that the trigger for NPPA intervention would be set-off at lesser levels of price rise too.
While the state-level DPCO cells would ensure stricter monitoring of overcharging and violations of price control norms on one hand, reducing the price rise limit would make increasing prices on non-scheduled drugs too difficult, on the other.
"These state-level DPCO cells would be manned by 6-8 people and would be set up in 18 states initially. The first phase would cover bigger states such as Maharashtra, Gujarat, Andhra Pradesh and Tamil Nadu," said a government official.
While the corpus hasn't been set aside for setting up these cells, the Centre would be coughing up about Rs 4.5 crore (Rs 45 million) -- Rs 2000,000-2500,000 per cell -- for funding the establishment expenses.
The apex body for these cells would be the NPPA, which would receive regular reports from them, through computerised linkage, on prices and availability of drugs in that state.
The department also plans to introduce significant changes in the structure of "cost-based studies" of NPPA where the regulator would call for cost data from top 5 formulators, as per ORG-IMS, of each bulk drug, to set the price ceiling.
Another step the government might take would be the introduction of an interactive forum within NPPA, that would have participation from consumer groups, industry associations and states. The forum itself, would have a national-level body and another four bodies at regional levels.
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