New Delhi [India], August 6 (ANI): A Parliamentary Standing Committee has recommended a review of the pricing framework for non-scheduled medicines, while asking the government to examine the feasibility of reintroducing cost-based pricing in cases where significant price disparities or unusually high mark-ups are observed.
The recommendations are part of the 33rd Report of the Standing Committee on Chemicals and Fertilizers on the role, functions and duties of the National Pharmaceutical Pricing Authority (NPPA). The report was presented in the Lok Sabha on Thursday.
The committee noted that nearly 82 per cent of the pharmaceutical market comprises non-scheduled formulations, whose prices are fixed by manufacturers, while the NPPA only monitors price increases under the provisions of the Drugs (Prices Control) Order (DPCO), 2013.
“Noting that the huge market share (approximately 82%) belongs to the non-scheduled formulations whose prices are fixed by manufacturers themselves… the Committee have desired that the Department undertake, alongwith the Ministry/Department concerned and other stakeholders, a comprehensive review of the extant categorization of medicines to plug any possibility of arbitrary or unjustified fixation in initial prices of non-scheduled formulations,” the report said.
The panel also took note of the shift from cost-based pricing to market-based pricing under the DPCO, 2013 and recommended that the Ministry examine the feasibility of reintroducing a cost-based pricing mechanism through suitable statutory amendments wherever substantial price disparities or abnormally high mark-ups are noticed.
On trade margins, the committee referred to the Department’s own observation that “something needs to be done to contain these huge margins that are there in the distribution channel in some cases” and urged the Department to initiate corrective measures.
It further recommended that the Department finalise, within a clearly defined timeframe, the proposed enabling provision for incorporating a permanent Trade Margin Rationalisation (TMR) framework into the DPCO, 2013 after completing stakeholder consultations.
The committee also observed gaps in pharmaceutical market data, noting that sales through hospitals, dispensing doctors, Jan Aushadhi outlets, trade generics and direct-to-e-commerce supplies are not captured by Pharmarack. It recommended expanding the data collection framework to include these segments. (ANI)
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