Govt clips NPPA’s sweeping powers to control drug prices

The NPPA had invoked Paragraph 19 of the Drug Price Control Order. Under this, it has the authority to extend price control over medicines outside of the essential medicines list in “extraordinary circumstances” and in “public interest”. The companies also argued that bringing these drugs under a controlled price regime made manufacturing them economically unviable because volumes were low.

On September 18, the Delhi High Court directed the Government and the pharmaceutical companies to resolve the pricing issue expeditiously. Some of the drugs which came under price control following the May order were: Gliclazide, Glimepiride, Sitagliptin, Voglibose, Amlodipine, Telmisartan and Rosuvastatin, Heparin and Ramipril. These have an estimated market of around Rs.5,500 crore.

The latest move will benefit MNCs more than the domestic players as the former usually price their products much higher than the competition and then derive 100 per cent of their sales from the domestic market, said Sarabjit Kour Nangra, Vice-President Research (Pharma), Angel Broking.

Domestic companies that do not have a huge exposure to the local market will be insulated to a large extent as pricing is not the key growth driver for them. “Their products are, therefore, competitively priced,” she added. Business Line