Pill to Pep up Drug Industry Likely


NPPA in its present form may be wound up and deployed in pharma dept with new mandate

In a major overhaul of the country's drug policy, the government is likely to soon disband the National Pharmaceutical Pricing Authority (NPPA) in its present form and assume the power to set prices of essential medicines, as it seeks to address concerns that excessive controls were stifling innovation and competitiveness of the sector.

The revamped policy will also delink price control from essential medicines. Under the current regime, the moment a drug is brought under the list of essential medicines; it is subject to price control mechanism. The new system will be more flexible and prices will be regulated only when needed.

Senior government officials also decided last month to do away with the system of periodic renewal of licences for manufacturing and sale of drugs in the country. Licences will soon be granted for perpetuity. These decisions follow a meeting last month at the PMO. The meeting was attended by Niti Aayog CEO Amitabh Kant, Pharmaceutical Secretary Jai Priye Prakash, Health Secretary CK Mishra and DIPP Secretary Ramesh Abhishek.

ET had reported on October 4 that Kant had written to health ministry to do away with stringent regulatory regime in the sector as this was creating unnecessary hurdles for drug companies and was totally against the concept of ease of doing business in India.

The NPPA was set up as an independent drug price regulator in 1997 and currently over 450 medicines is under price control. A senior government official said henceforth, the right to regulate prices as and when required would rest with the government. “Drug price control order may be delinked from the national list of essential medicines and, the NPPA, in its present form and current func tion may be wound up and deployed in the department of pharmaceuticals with a new mandate,” said the official.

The official said licences granted under the Drugs and Cosmetics Rules for manufacturing and sale would be issued for perpetuity, `subject to their being withdrawn, suspended, cancelled or surrendered'. It has been further decided that heath ministry will put in place a system for third party certification and self certification on annual basis.

The usual process of regular inspections will continue.

These steps are being taken with a view to optimise the full potential of India's pharmaceutical sector.

It is estimated that the sector has the potential to grow to $55 billion in revenues by 2020 from $20 billion in 2015.

The sector has attracted foreign investment worth $14 billion since 2000 and it's the sixth-largest recipient of FDI across all industry categories.

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