Parliamentary Panel Urges New Policy to Regulate Non-Scheduled Drug Prices
A parliamentary panel recommends a new policy to control the prices of non-scheduled drugs, which currently lack regulation, to ensure affordability and accessibility.
Photo by Ronak Naik
त्वरित संशोधन
Parliamentary panel recommends a new policy for non-scheduled drug prices
Scheduled drugs are regulated by NPPA and DPCO
Non-scheduled drugs currently have market-based pricing
High out-of-pocket expenditure on healthcare in India
दृश्य सामग्री
Drug Price Control in India: Scheduled vs. Non-Scheduled Drugs
This table highlights the current regulatory differences between scheduled and non-scheduled drugs, illustrating the gap that the Parliamentary Panel aims to address for greater affordability.
| Feature | Scheduled Drugs | Non-Scheduled Drugs |
|---|---|---|
| Definition | Essential medicines included in the National List of Essential Medicines (NLEM) | Drugs not included in the National List of Essential Medicines (NLEM) |
| Price Control | Directly controlled by NPPA; ceiling prices fixed | Market-based pricing; no direct price control (manufacturers allowed 10% annual MRP increase) |
| Regulatory Body | National Pharmaceutical Pricing Authority (NPPA) fixes and monitors prices | NPPA monitors prices but does not fix them (except for specific interventions like trade margin rationalization) |
| Legal Basis | Drug Price Control Order (DPCO) under Essential Commodities Act, 1955 | Primarily market forces, with limited monitoring under DPCO |
| Affordability Impact | Aims to ensure affordability and accessibility of essential medicines | Often leads to high costs, making essential medicines unaffordable for many |
| Parliamentary Panel's View | Existing mechanism for essential drugs | Urges new policy to regulate prices and rationalize trade margins to ensure affordability |
India's Healthcare Burden: Out-of-Pocket Expenditure (OOPE)
This dashboard presents key statistics on India's healthcare financing, emphasizing the high burden of out-of-pocket expenditure that necessitates policy interventions like drug price regulation.
- OOPE as % of Total Health Expenditure
- ~60-65%
- Medicines' Share in OOPE
- >50%
- Public Health Spending as % of GDP
- ~1.2-1.5%
- NHP 2017 Target: Public Health Spending
- 2.5% of GDP by 2025
India has one of the highest OOPEs globally, indicating a weak social safety net in health and significant financial burden on households.
Medicines constitute the largest component of OOPE in India, making drug price regulation critical for affordability.
Historically low public spending on health is a primary reason for high OOPE, pushing people into poverty.
The National Health Policy 2017 aims to significantly increase public health expenditure to reduce OOPE and improve health outcomes.
परीक्षा के दृष्टिकोण
Government intervention in market mechanisms (economic policy)
Healthcare access, affordability, and equity (social justice, public health)
Role and mandate of regulatory bodies (NPPA)
Dynamics of the pharmaceutical industry in India
Impact of out-of-pocket expenditure on poverty and health outcomes
विस्तृत सारांश देखें
सारांश
A parliamentary standing committee has urged the government to formulate a new policy aimed at regulating the prices of non-scheduled drugs. Currently, only scheduled drugs, which are deemed essential, fall under price control through the National Pharmaceutical Pricing Authority (NPPA) and the Drug Price Control Order (DPCO). However, non-scheduled drugs, which constitute a significant portion of the market, operate under a market-based pricing mechanism, often leading to high costs.
The panel highlighted that this lack of regulation makes essential medicines unaffordable for many, especially given the high out-of-pocket expenditure on healthcare in India. Recommendations include rationalizing trade margins and expanding the scope of price control to ensure greater accessibility and affordability of all necessary medicines.
पृष्ठभूमि
India's pharmaceutical sector is a global leader in generic drug production, often referred to as the 'pharmacy of the world'. However, domestic drug pricing and access to affordable medicines have been persistent challenges. To address this, the government introduced the Drug Price Control Order (DPCO) under the Essential Commodities Act, 1955, to regulate prices of essential medicines.
The National Pharmaceutical Pricing Authority (NPPA) was established in 1997 to implement the DPCO and fix/revise prices. Initially, DPCO covered a broader range of drugs, but subsequent amendments, particularly DPCO 2013, linked price control primarily to the National List of Essential Medicines (NLEM), categorizing drugs into 'scheduled' (under price control) and 'non-scheduled' (operating under market-driven pricing).
नवीनतम घटनाक्रम
A parliamentary standing committee has recently highlighted the critical issue of high prices for non-scheduled drugs. These drugs, which constitute a significant portion of the market and are often essential for various conditions, fall outside the direct price control mechanism of the NPPA.
This lack of regulation leads to high out-of-pocket expenditure (OOPE) for patients, making essential medicines unaffordable for many. The panel has urged the government to formulate a new policy to regulate these prices, recommending measures such as rationalizing trade margins and expanding the scope of price control to ensure greater accessibility and affordability of all necessary medicines.
बहुविकल्पीय प्रश्न (MCQ)
1. Consider the following statements regarding drug price regulation in India: 1. The National Pharmaceutical Pricing Authority (NPPA) is an attached office of the Ministry of Health and Family Welfare. 2. Scheduled drugs are those included in the National List of Essential Medicines (NLEM) and are subject to price control under the Drug Price Control Order (DPCO). 3. A parliamentary panel has recently recommended expanding the scope of price control to non-scheduled drugs to improve affordability. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.3 only
- D.1, 2 and 3
उत्तर देखें
सही उत्तर: B
Statement 1 is incorrect. The National Pharmaceutical Pricing Authority (NPPA) is an attached office of the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, not the Ministry of Health and Family Welfare. Statement 2 is correct; scheduled drugs are indeed linked to the NLEM and fall under DPCO price control. Statement 3 is also correct, as per the news, a parliamentary panel has urged for expanding price control to non-scheduled drugs.
2. In the context of India's pharmaceutical sector, the term 'trade margin rationalization' is sometimes proposed as a mechanism to control drug prices. Which of the following best describes its potential impact?
- A.It primarily aims to reduce the cost of raw materials for drug manufacturers.
- B.It seeks to cap the profit margins of pharmaceutical companies at the manufacturing stage.
- C.It involves setting limits on the mark-up charged by distributors and retailers over the ex-factory price of drugs.
- D.It focuses on encouraging competition among generic drug manufacturers to lower prices.
उत्तर देखें
सही उत्तर: C
Trade margin rationalization specifically refers to controlling the margins or mark-ups applied by various intermediaries (wholesalers, distributors, retailers) in the supply chain, from the manufacturer's ex-factory price to the final retail price. It aims to reduce the final price paid by the consumer by capping these intermediary profits. Option A relates to input costs, option B to manufacturer profits, and option D to market competition, which are distinct mechanisms.
3. With reference to the regulation of drug prices and access to medicines in India, consider the following statements: 1. The Drug Price Control Order (DPCO) is issued under the provisions of the Essential Commodities Act, 1955. 2. Out-of-pocket expenditure (OOPE) on healthcare in India is predominantly driven by medicine purchases rather than hospitalisation costs. 3. The National List of Essential Medicines (NLEM) is updated periodically by the Ministry of Health and Family Welfare based on disease burden and cost-effectiveness. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.1 and 3 only
- C.2 and 3 only
- D.1, 2 and 3
उत्तर देखें
सही उत्तर: D
Statement 1 is correct; the DPCO derives its legal authority from the Essential Commodities Act, 1955. Statement 2 is correct; various studies and government reports indicate that medicines constitute a significant, often the largest, component of out-of-pocket expenditure on healthcare in India, frequently exceeding hospitalisation costs for many households. Statement 3 is also correct; the NLEM is indeed updated periodically by the Ministry of Health and Family Welfare, typically by an expert committee, considering factors like disease prevalence, efficacy, safety, and cost-effectiveness.