There seems to be a lot of mis-information around the latest supposed “cap” on National Pharmaceutical Pricing Authority (NPPA)’s powers. I thought I would try to clear some of this up.
1. Why exactly is the NPPA’s power being reduced?
It’s technically not being reduced. It’s being clarified. As Madhulika pointed out in our post on the topic: The government noted that the NPPA was stepping beyond its given powers by interpreting “extraordinary circumstances … in public interest” in a manner that was inconsistent with the power it was given. And asked that the relevant guideline that had been issued by virtue of that mis-interpretation be withdrawn. The reason that the NPPA had over-reached was because it was empowered to issue this guideline only in “extraordinary” circumstances but the circumstances it had claimed were, in fact, ordinary: inter-brand price variation. (Read the post for more)
2. Why are prices going up? Why is the government allowing this?
The withdrawal is prospective, not retrospective. So any price caps issued under the withdrawn guideline will continue to remain. There is a DNA article, that I’ve been seeing shared all over on my social networks, that I’d like to correct. The DNA article states that the price of Glivec (generic name: imatinib) is rising from Rs 8500 to Rs 1.08 lakhs. In reality though, there are, and continue to be about ten generic forms of imatinib that are available around Rs 8000 for a month’s supply! (assuming a standard monthly dose of400mg/day). It may or may not be true that Glivec, Novartis’ brand version of imatinib, is still priced at Rs 1.08 lakhs – I haven’t checked this [Edit/Update: See comment 1.1 below], but this was what the drug was priced at when challenged in the Novartis v. Union of India case. As far as I know the prices that have existed before the guidelines continue to remain the same after the withdrawal!
Similarly, the DNA article gives the example of Plavix (generic name: clopidogrel) saying that the prices have gone up from Rs 147 to Rs 1615. You can see for yourself here that there are 64 generics offering this drug at a wide range of prices starting from as low as Rs 78/month (assuming a standard monthly dose of 75mg per day).
3. Is this withdrawal connected to Modi’s US trip?
This seems to be the bait for the misinformation spread. The original price cap came into existence a few days after the Modi government came into power. And this withdrawal happened a few days before Modi’s US trip. It could be very well the case that it was ordered done so as to show US and Big Pharma that India was open to listening to them. However, that does not change the fact that this seems to have been done in a perfectly legitimate manner. And while, as any regular reader of the blog would know, I’m always happy to rant against US pressure on India’s IP policies, it does not bode well to go into a situation where there is pressure on you, knowing that there is a loophole in your current policy that can be pointed at as “proof” that India has a biased stand. So, I don’t know whether the withdrawal was to gain favour, or to patch up policy loopholes. I can only hope it’s the second – as there is going to be a long hard interlocking of policy horns ahead of us.