Supreme Court allows Centre to cap drug prices

22 Oct 2016 | Written by Supriya Kaur; Edited by NewsBytes Desk

The SC ruled on multiple central government notifications that were issued to cap retail prices of drug formulations.

The ruling was in the government's favour and would allow the centre to prevent profiteering by pharmaceutical companies.

In the past, pharma companies had been accused of over-charging patients under pretext of inflated packaging-costs.

The Supreme Court's decision has come as a major relief to patients.

In context: Government plans overhaul of India's drug policy

1999 - 2003Regulating drug prices

Between 1999-2003, the Central government had issued multiple notifications under the Drugs (Prices Control) Order, 1995 to regulate prices of essential medicines.

The notifications prescribed norms for packing charges, conversion cost and process-loss of raw materials to determine drug retail prices.

Several pharma companies subsequently moved the courts to stay these notifications; they claimed that government norms to determine packaging-costs were arbitrary and discriminatory.

DetailsPharma companies accused of overcharging

During court proceedings, the government had contended that pharma companies had been significantly overcharging patients.

In this regard, the 'National Pharmaceutical Pricing Authority' (NPPA) had issued show-cause notices to pharma companies like Johnson & Smith Co., Ishaan labs, Cipla and others.

The NPPA alleged that pharma companies had charged significantly higher retail prices than those prescribed under various government notifications.

Love India news?
Stay updated with the latest happenings.

Recovering dues from pharma companies

According to the Indian Drug Price Regulator, the NPPA, due to overcharging between August 1997 to April 2016, pending of dues from pharma companies currently stands at nearly Rs. 5,000 crore. However until now, the NPPA has succeeded in recovering less than 10% of dues.

22 Oct 2016Supreme Court allows Centre to cap drug prices

Other pharma reforms in the pipeline

OverviewOther pharma reforms in the pipeline

The central government is contemplating overhauling the drug policy in India; the PMO has held several meetings with the government's think-tank, Niti Aayog, and officials from health and pharma ministries in this regard.

The government intends to end the practice of periodic-renewals of manufacturing licences and wants to facilitate medical and drug research in India to prevent further loss of pharma business to China.

07 Mar 2017Prices of cancer drugs cut by up to 86%

National Pharmaceutical Pricing Authority has slashed prices of some cancer drugs by upto 86%.

This comes as a major relief to thousands, especially those who are forced to leave their years-long treatment midway due to high expenses.

Prices of other medicines apart from cancer have also been capped by an average of 25-50%.

NPPA has assured more drugs for cancer would be available soon.

Love India news?
Stay updated with the latest happenings.

20 Mar 2017E-portal to soon regulate sale of drugs

The health ministry has proposed setting up of an e-portal to regulate the sale of drugs, which aims to make the whole process more transparent.

All manufacturers as well as sellers would be required to register themselves on the platform and enter data including batch number, quantity sold and expiry date.

Prescription by a registered medical practitioner will have to be furnished for medicines.