The National Pharmaceutical Pricing Authority (NPPA), which is stuck with over 1,000 court cases with pharma companies that allegedly overcharged consumers for Rs 4,000 crore, is now planning to come out with new measures to stop such practices and create consumer awareness.
The authority has suggested to make mandatory display of a mark on drug packs to distinguish them as scheduled drugs under the National List of Essential Medicines (NLEM) and mentioning the ceiling price per unit on the drug packs as well. All scheduled drugs under NLEM come under price control.
“The proposal under consideration is to make it mandatory to display a scheduled drug by way of a distinguishing mark (maybe a bold red strip with the words ‘DPCO Scheduled Drug’ printed on it in black ink) and also to mention its ceiling price per unit,” NPPA said in its November 14 notification.
It seems NPPA is running out of options to stop overcharging done by pharma companies. Between 1997 and August 2014, NPPA has filed around 1,056 cases against a number of pharma companies, including Cipla, Ranbaxy, Dr Reddy’s and Pfizer, which cumulatively account for a total overcharging amount of Rs 3,800.85 crore. However, it has been able to recover only about Rs 341.87 crore as on August 31, according to NPPA.
“There are thousands of overcharging cases booked against erring manufacturers by the NPPA, which involve recovery of nearly Rs 4,000 crore. But on account of a number of cases being locked up in litigation, the NPPA has so far been successful in recovering less than 10% of the total dues,” it said in its November 14 notification.
The drug pricing regulator has also invited comments, to be submitted within two weeks, from stakeholders, including pharma industry and trade associations, consumer organisations and state drug controllers.
“It is considered necessary to make all consumers aware of which all drugs are scheduled as well as their ceiling/ retail price as notified by the NPPA from time to time. This measure will not only enhance consumer awareness and vigilance, but also enhance accountability and self-regulation among the pharmaceutical industry and trade,” it said.
One of the biggest challenges being faced by the NPPA is to monitor ceiling/ retail price compliance in respect of scheduled drugs/ new drugs. According to the regulator, although drugs are covered under the Essential Commodities Act 1955 (10 of 1955), and the Drug pricing control order (DPCO) 2013 specifically aims at ensuring the availability and affordability of lifesaving and essential drugs for all, there is very little consumer awareness in this regard, including that of price fixation under the DPCO.
“There is a great degree of ignorance about the National List of Essential Medicines (NLEM) 2011 notified by the Ministry of Health and Family Welfare to promote scientific and rational use of medicines that is both clinically and cost effective, which forms part of the First Schedule to the DPCO 2013,” NPPA said.
Based on discussion with the ministry of consumer affairs, food and public distribution, it is proposed to examine the feasibility of making the abovementioned disclosures mandatory by way of a suitable notification under the Legal Metrology Act 2009 and the Legal Metrology (Packaged Commodities) Rules 2011, both of which are meant to protect consumer interest.