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India
18 Aug 2017

Encouraging generic medicines, capping margins: Government's proposals in pharmaceutics

After capping prices of stents and knee implants, the government is now planning to restrict trade margins to make drugs cheaper and boost the local industry.

Among the many suggestions are prescribing trade margins, replacing branded medicines with generic drugs, and encouraging research and development.

A significant proposal in the draft is restructuring the National Pharmaceutical Pricing Authority (NPPA), the price-regulating body.

In context

Government continues efforts to make drugs cheaper
Encouraging generic drugs in place of branded medicines

Generic medicines

Encouraging generic drugs in place of branded medicines

To encourage generic drugs, the policy suggests stopping public procurement/dispensing of brands.

For this, single ingredient drugs will be sold by their pharmaceutical name/salt name. The manufacturer would be allowed to mention its name on the drug package.

Brand names may be used in case of patented drugs and Fixed Dose Combination (FDCs). However, the principle of 'one company-one-drug-one-brand-name-one price' would be followed.

NPPA

Curtailing NPPA's powers: Government, regulator to be "distinct agencies"

If the policy is approved, NPPA will lose powers. The government will decide drugs whose prices are to be controlled, and the NPPA will lay down price ceilings and enforce them.

NPPA won't revise already-fixed prices unless directed by the government or courts.

It will also be assisted by an advisory body; it can modify/reject its advice but has to assign reasons in writing.

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The draft policy will be tabled after suggestions from stakeholders

Other suggestions

The draft policy will be tabled after suggestions from stakeholders

To make prescribing easy for practitioners, an e-prescription system will be installed which will have generic drug names input.

"Institutions receiving supplies directly from manufacturers/distributors or retailers will also be covered under the trade margin reforms," the policy said.

The health department has sought feedback from stakeholders. It will be then tabled before the Cabinet.

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