In a move to establish a new code for setting the prices and availability of essential medicines and medical devices in the country, the Department of Pharmaceuticals ordered the formation of a high-level committee on March 12.
According to a copy of the orders reviewed by CNBC-TV18, the committee is named "Committee for Reforms in Pricing Framework for Drugs and Medical Devices."
It will consist of three core members: the Secretary of the Department of Pharmaceuticals, the Chairman of the National Pharmaceutical Pricing Authority, and the Senior Economic Adviser of the Department of Pharmaceuticals.
The committee is also open to having two Special Invitees from the industry: the Secretary General of the Indian Pharmaceutical Alliance and the Chief Executive Officer of the Indian Drugs Manufacturer’s Association, along with any other special invitee.
The terms of reference of the committee include institutional reforms within the National Pharmaceutical Pricing Authority (NPPA), how to balance the price and availability of essential medicines while providing incentives to the industry to sustain growth and exports, how to design a price moderation framework for medical devices while providing incentives to the industry to sustain growth and minimise imports, and how to design a price moderation framework for emerging and precision therapies to facilitate their timely reach to needy patients, all to be included in a draft of the new Drugs and Medical Devices (Control) order, as stated in the order.
The government has given three months to the committee to submit its report.
However, critics argue that the composition of the committee favours the industry and that the committee might not be able to devise a fair pricing mechanism.
Malini Aisola, Co-Convenor of Aidan, highlights several concerning aspects regarding the current committee setup. "It is important to note that two industry associations have been given the status of special invitees to the committee, which is problematic. All stakeholders should have an equal opportunity and access to engage with the committee. It risks delegitimising the committee because of its bias towards the pharma industry. No specific rationale has been given for the Terms of Reference (TOR)."
"There is, for example, a point about restructuring the NPPA but we are unaware of the motivation for this. Two TORs emphasise the balance of price regulation with industry incentives which gives a misleading picture that the current market-based regulations are effective or extensive, neither of which is true. The TOR is about a total redrafting of the DPCO," Aisola said.
She also mentioned that the NPPA is still primarily dependent on a proprietary database, Pharmatrac, for setting prices. "What is lesser known is that the database is controlled and owned by top Indian pharma companies. All of these taken together indicate a rising influence of the industry in policymaking. On the eve of elections, the government appears to be undermining an already weak regulation and instead of reiterating commitment towards improving access to essential health products and privileging the industry," she added.
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