Once looking to clip NPPA’s wings, govt now plans to give drug price regulator more power

In its latest report, the Department of Pharmaceuticals has laid down plans to 'strengthen NPPA for an enhanced mandate'.

Medicines | Representational image | PxSphere

New Delhi: After proposing to dilute the powers of National Pharmaceuticals Pricing Authority (NPPA) to fix drug prices, the Narendra Modi-led government has now taken a u-turn with its plan to give the body more regulatory powers.

In a latest presentation by the Department of Pharmaceuticals (DoP), which falls under the Ministry of Chemicals and Fertilisers, the government plans to “strengthen NPPA for an enhanced mandate”. DoP is NPPA’s parent body.

The presentation – “DoP’s vision plan till 2024” – a copy of which ThePrint has seen, was chaired by the department’s secretary P Raghavendra Rao and attended by other joint secretaries under the ministry.

“NPPA is likely to be given the charge of additional verticals of regulating the prices of medical devices apart from expanding the price control on medicines and slashing trade margins,” said a senior official from DoP on condition of anonymity .

The NPPA is an autonomous body that regulates prices of medicines under the National List of Essential Medicines (NLEM) and also monitors the prices of drugs outside the list.

Earlier drafts to curtail NPPA’s powers

In 2016, the NITI Aayog, health ministry, and DoP had held several meetings to discuss dissolving the NPPA in its current form, but the plan it did not materialise.

A year later, in 2017, a draft on pharma policy was prepared by the DoP under which a decision was made to take away the absolute price-fixing powers of NPPA. This draft is still pending.

“NLEM will remain the basis of the medicines to be brought under price regulation… the Department of Pharmaceuticals will prepare the list of medicines for price regulation and transmit them to the NPPA for fixing the price ceilings,” said the DoP draft.

In March 2018, the government had removed NPPA chairperson Bhupendra Singh for slashing prices of cardiac stents and knee implants by 80 per cent using emergency powers. This was a crucial incident that further led to the government proposing to curtail NPPA’s powers.

In September that year, a draft policy by DoP was presented before the Prime Minister’s Office (PMO) – a meeting that was also said to have been presided over by Prime Minister Narendra Modi. This draft would have further diluted the powers of NPPA but it was not approved.

Incidentally, NPPA’s move to slash prices of cardiac stents and implants was later hailed by PM Modi in many of his rallies before the 2019 general elections as welfare initiatives for the common man. In his victory speech on the evening of 23 May, Modi had also said that his government’s efforts to alleviate the pain of those suffering from illnesses have borne fruit.

New Plan

The NPPA is often known as the ‘unfriendly’ office among pharma industries for its role in trying to reduce the maximum retail prices (MRPs) of drugs.

Things, however, started to change after Shubhra Singh was appointed as its chairperson in November last year. Shubhra, who took the charge of NPPA after the unceremonious exit of its former chairman Bhupendra, was picked from the Department of Industrial Policy & Promotion (DIPP) – a body responsible for keeping Indian industrialists happy by devising pro-industry policies and protecting their interests.

Going ahead with the Modi government’s push for inclusive economic growth, the NPPA is likely to be given crucial roles for the next five years.

In its presentation, the DoP talks about a five-year plan to “amend the existing drug pricing control order (DPCO) with a view to improving ease of doing business.” Importantly, regulation of DPCO is within the NPPA’s mandate.

Moreover, the government aims to “formulate medical devices pricing policy and revamp the pharmaceutical pricing policy”, which also falls under the NPPA.