New Regulations for Drug Pricing in India

India’s National Pharmaceutical Pricing Authority (NPPA) has issued new regulations on drugs not currently under the mandatory price control list. These drugs are referred to as “non-scheduled formulations” and are currently sold freely. Companies will be short-listed for price control if they increase the price of non-scheduled formulations by more than 10% in one year and the drug’s annual turnover exceeds 10 million rupees (US $233,000).

However, companies affected by this potential price control will only be those whose product has 20% of the market share or is one of the top 3 products in its category. Manufacturers will be asked to provide reasons for price increases and will be directed to bring down prices if the price hikes are judged to be unreasonable.

Currently, there is regulated price control on 74 active ingredients and their formulations. There have been various proposals to increase this list. The Ministry of Chemicals and Petrochemicals suggested controlling the prices of 354 drugs based on a Supreme Court order to make essential medicines affordable. However, there has been considerable debate as to whether price controls equate with affordability. As of now, there has been a draft of the new pricing policy for years but approval on this regulation has been delayed.

The government is also debating price controls for patented drugs. A recent panel meeting discussed possibilities of denying marketing rights to patented drugs whose prices have not been negotiated. Multinational companies have lobbied against any restrictions on pricing of patented drugs. A report on the government’s decision is expected to be released by the end of April 2007.