THE pricing of drugs is a veritable minefield in India, and any changes in the rules, resulting in a hike or reduction in the price of medicines, draws the ire of political parties, drug-makers, activists and various other lobbies.

The pricing of pharmaceutical products is indeed a sensitive matter and inevitably the matter gets dragged to various courts.

Worse, there is a lot of obfuscation on the issue of drug pricing, or control of the prices of essential drugs, and vested interests try to attack their rivals by misrepresenting facts.

The latest brouhaha on drug pricing has had its fair share of controversies and court cases and despite weeks of heated debates the matter is still far from resolved. Last week, the Supreme Court refused to intervene in the dispute and asked the petitioners to approach the government seeking a modification of its order.

The latest controversy can be traced back to May 16, the day when the results of the general elections were declared and the BJP emerged as the single-largest party with a majority in parliament. By a strange coincidence, the National Phar­maceutical Pricing Authority (NPPA), the drug regulator, met on the day and took an important decision: exercising powers under paragraph 19 of the Drugs (Prices Control) Order, 2013; it drew internal guidelines enabling it to fix prices even for non-essential drugs in public interest. A few weeks later it issued a notification setting a ceiling price for 108 drugs used for treating diabetes and cardio-vascular diseases.

The government, through the NPPA, controls the price of essential drugs, which feature in the National List of Essential Medicines (NLEM). The last such list, drawn out about three years ago, features 348 essential medicines, accounting for about 30pc of all medicines sold in India, whose prices are controlled. The government has also armed itself with paragraph 19 of the DPCO, which enables the regulator to extend the provisions of the order and impose a price ceiling under extraordinary circumstances and in public interest.

A few weeks after the NPPA’s move to include 108 non-essential drugs under the price control order, the BJP government sought the advice of the solicitor-general, who told it that the provisions of paragraph 19 could be exercised only under exceptional circumstances, such as when there is an epidemic. In September, the government got the NPPA to withdraw the internal guidelines relating to price control over non-essential drugs, but on a prospective basis; the reduction in the price of 108 drugs would stay.

The government’s order to the NPPA came on the eve of Prime Minister Narendra Modi’s visit to the US. The Congress party slammed the government’s move, accusing Modi of succumbing to pressures from American drug multinationals. Congress leaders claimed that pharma firms had jacked up the price of life-saving (not essential) medicines, including cancer drugs manifold after the government’s orders to the NPPA.

Drug makers, who were worried by the NPPA’s move to expand the list of drugs under price control, denied the charges, claiming that the price of these life-saving drugs had been reduced further. They also dragged the authority to court.

The BJP too accused the Congress of misrepresenting facts and claimed that the party had in fact raised the number of medicines under price control from 440 to 489; the price of 108 non-scheduled drugs had also come down by 30pc, it said.

GOVERNMENTS in India have always placed a curb on the price of essential drugs to enable the poor to have access to affordable medicines. While the NPPA was established in 1997, drug price control has been in operation for several decades.

In the late 1970s, the government controlled the price of nearly 90pc of the drugs that were sold in India. However, over the years — and especially after economic reforms were initiated in the early 1990s — the government has eased the curbs, allowing drug firms to charge more for non-essential medicines.

Both the domestic and international drug lobby have been critical of excessive control of drug prices, claiming that this had discouraged the industry from investing in research, good manufacturing practices and in infrastructure.

The National Pharmaceutical Pricing Policy 2012 drew out the NLEM — and the current list of 348 medicines — where price curbs are imposed. While the NPPA’s bid to expand the list to non-essential drugs has apparently failed for the time being, the regulator is keen to expand the list of essential drugs.

The NPPA has now started an exercise to identify more drugs for the NLEM to ensure that ‘all lifesaving and essential drugs of mass consumption’ are brought within its purview. But the industry has expectedly slammed the regulator’s move to bring more drugs under price control.

D.G. Shah, secretary-general, Indian Pharmaceutical Alliance (IPA), points out that it is not the job of the regulator to draw up the list of essential medicines. He points out that there are fixed criteria, and mass consumption is not one of them. The IPA wants the regulator to include medical experts before revising the essential medicines list.

The drug industry fears that excessive price curbs would act as a disincentive to manufacturers, who would simply stop producing essential medicines. The era of such curbs resulted in India facing an acute shortage of essential medicines.

However, with healthcare costs soaring in India, there is a growing clamour for increasing curbs on the price of medicines. Pharmaceutical firms are known to rope in doctors — by providing them incentives including foreign travel and expensive gifts — who prescribe specific branded drugs to patients.

With the state-owned healthcare sector crumbling across the country, millions of poor and middle-class Indians are forced to depend on private hospitals, clinics and doctors. But with medicines and hospital costs becoming prohibitive, many find their life’s savings wiped out in a matter of months after a family member is afflicted by a disease. Drug price control, under such circumstances, will always find favour with politicians.

Published in Dawn, Economic & Business, November 3rd, 2014