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HomeHealthModi govt allows 15-20% price hike in medicines that have ‘innovations’

Modi govt allows 15-20% price hike in medicines that have ‘innovations’

Govt to allow pharma firms to increase price of drugs that are re-launched with “innovations” such as reduced side effects, or user-friendly administration techniques like skin patches.

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New Delhi: Medicines with “incremental innovations” will now be priced higher than the regular drugs, ThePrint has learnt. 

In a meeting on 9 December, the country’s drug price watchdog, the National Pharmaceuticals Pricing Authority (NPPA), has decided to allow pharmaceutical firms to increase the price of drugs that are re-launched with “innovations” such as reduced side effects, delayed suspension timings or user-friendly drug administration techniques like skin patches and digital drug release.    

“NPPA supports incremental innovations that could increase the therapeutic value and effectiveness of a drug,” read the minutes of the NPPA meeting, which was its 71st.  

Accepting the recommendations of a multi-disciplinary committee of experts, the NPPA said, “…in case the incremental innovation is not supported by a published journal, well-designed study, adequate trial, conclusive clinical data, then an incremental price increase upto 15 per cent be allowed…”

“…In case, the incremental innovation is supported by published journal, well designed study, adequate trial, conclusive clinical data, then an incremental price increase up to 20 per cent be allowed.”  

At present, the cost of drugs are determined by ceiling prices. 

The ceiling price is calculated by taking the average price of all drugs that have 1 or more than 1 per cent of the market share in the same category. 

Following the NPPA decision, companies can now apply for the price hike under the incrementally innovative medicines category with documents to prove their claims. If they get approval, they can then raise prices by about 15-20 per cent higher than the derived ceiling price.  

The decision has the backing of the industry, which labelled the move as a “welcome step.” 

“We have been requesting the government for a long time to make such recognition a part of the policy. It is a welcome step and will motivate companies to pursue innovation more vigorously,” said Deepnath Roy Chowdhury, president, Indian Drug Manufacturers Association, a lobby representing over 1,000 pharmaceutical companies.

Also read: Gargled saline water could now replace painful biopsies to detect oral cancer, tumours

Cipla, Glenmark devices benefit right away

Soon after finalising the decision, the NPPA approved the price of two products, whose manufacturers claimed innovations in their medicines. 

Glenmark Pharmaceuticals’s Digital Inhalation device “Digihaler”, an electronic inhaler for asthma patients, is one among them.

The Mumbai-based firm says that it has provided an accurate digital dose counter along with low dose warning indicator to enable Asthma and chronic obstructive pulmonary disease (COPD) patients to keep track of their daily doses. 

The other product approved under this category is Cipla’s ‘Synchrobreathe inhaler device’. The company said the device will automatically deliver the dose of medicine as a ‘mist’ when a patient inhales from it. 

“Synchrobreathe will also reduce the time that healthcare providers spend in teaching patients the correct way to use an inhaler,” the company claims

Also read: Capping profits will wipe out low-cost generic medicines, drugmakers write to PM Modi


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