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India’s National Pharmaceutical Pricing Authority (NPPA) has announced that some key cancer drugs, antibiotics and medicines which are used to treat cardiovascular diseases and tuberculosis will become cheaper to buy by up to 50 per cent within the next 45 days.

By Lucy Brake on Jun 18, 2013

According to reports in India’s leading business daily newspaper, the Business Standard, the decision to reduce the pricing of essential medicines is based on the NPPA’s new pharma pricing policy.

These new prices are calculated in line with the Drug Price Control Order 2013, recently notified by the Indian government in line with the new pharma pricing policy cleared by the government last year. The Drug Price Control Order will reduce prices of 348 essential medicines. The new order authorises the NPPA to regulate prices of essential medicines as listed in the National List of Essential Medicines 2011.

The notification of new prices means that many of the maximum retail prices of concern pharmaceuticals will fall, on average, between 10 and 30 per cent, with some up to 50 per cent. Cardiovascular medicines will reduce by 20 to 30 per cent and the anti-hypertension drugs will drop by 15 to 30 per cent. The most significant reduction is expected to be for antibiotics with between 15 and 50 per cent decrease.

The Drug Price Control Order mandates NPPA to cap prices of the essential medicines based on an arithmetic average of all drugs in a particular segment that have market share of more than one per cent. However, according to India’s Business Standard the drugs currently priced below the cap would not be allowed to hike prices to match the cap. “This is significant as the new formula does not allow prices to go up from the current level.”

The news outlet India Express reports that this decision “underscores the need for increasing production in drug PSUs, strengthening the drug regulatory infrastructure and rationalisation of pharma retail trade”.

This will be the first set of price notifications by the regulator. “In the first phase, we are notifying only those categories and drugs for which we have ample data and calculation is done. Within 15-20 days, we will notify the next lot,” an official said when talking to reporters.

Pharma companies like GlaxoSmithKline, Cipla and Ranbaxy, which are currently selling these essential medicines, will have 45 days from the date of notification to replace the existing stock with new packs carrying revised maximum retail prices.