DoP Expands Committee Responsible for Drugs & Medical Devices Pricing Reform

This move aims to ensure a more inclusive and comprehensive approach to drug and medical device pricing in India.

The Department of Pharmaceuticals (DoP) has once again expanded its Committee for Drugs and Medical Devices, which is responsible for reforms in the pricing framework.

Initially formed in March this year, the committee's scope has broadened to include representatives from major pharmacy trade organizations, healthcare service providers, and doctors' associations, as well as various patient advocacy groups.

This move aims to ensure a more inclusive and comprehensive approach to drug and medical device pricing in India.

Rationale Behind this Expansion

In its latest order, the DoP has added seven more members to the list of special invitees, bringing the total to 19.

This is the second expansion of the committee since April when the DoP included all major pharmaceutical manufacturing industry organizations in response to industry representatives' requests.

The new additions include representatives from:

-All India Drug Action Network (AIDAN)

-Healthcare Foundation of India (NAT Health)

-Patient Safety and Access Initiative of India Foundation

-Indian Medical Association (IMA)

-All Indian Organisation of Chemists and Druggists Association (AIOCD)

-Laghu Udhyog Bharti

-Médecins Sans Frontières (MSF) India

The expanded list aims to bring many perspectives to the table. These new members join the existing representatives from major pharmaceutical and medical device organizations, ensuring that the committee benefits from diverse insights and expertise.

The initial committee, as formed on March 12, 2024, allowed for two special invitees from the pharmaceutical industry, specifically from the Indian Pharmaceutical Alliance (IP Alliance) and the Indian Drugs Manufacturers' Association (IDMA).

This was later expanded to include 12 members through an order on April 22, 2024.

The 12 additional members included:

- Director General of the Organisation of Pharmaceutical Producers of India (OPPI)

- Managing Director, US-India Strategic Partnership Forum (USISPF)

- Chairman of the Medical Technology Association of India (MTaI)

- Director General, Confederation of Indian Industry (CII)

- Director, US India Business Council (USIBC)

- Secretary General, Federation of Indian Chambers of Commerce and Industry (FICCI)

- Forum Coordinator, Association of Indian Medical Device Industry (AiMeD)

- Executive Director of Federation of Pharma Entrepreneurs (FOPE)

- Representatives of Advamed

- Association of Diagnostic Manufacturers of India (ADMI)

- Bulk Drugs Manufacturers Association of India (BDMAI)

- Associated Chambers of Commerce & Industry of India (Assocham)

Committee's Mandate

The committee, chaired by Arunish Chawla, secretary, DoP, includes Kamlesh Kumar Pant, chairman of the National Pharmaceutical Pricing Authority (NPPA), and Awadhesh Kumar Choudhary, senior economic advisor, DoP, as its core members.

The committee's mandate includes several critical tasks, including balancing drug and medical device pricing while ensuring accessibility and sustainability.

Key focus areas include evaluating institutional reforms to enhance the National Pharmaceutical Pricing Authority (NPPA) 's efficiency and effectiveness.

Another critical area involves balancing the price and availability of essential medicines to ensure affordability while fostering industry growth and boosting exports.

Additionally, efforts are being directed toward developing a pricing framework for medical devices that supports industry expansion and reduces import dependence.

Emphasis is also placed on crafting pricing strategies for emerging and precision therapies, ensuring patients have timely access to innovative treatments.

The committee is tasked with developing a draft Drugs and Medical Devices (Control) Order, which will serve as a comprehensive guideline for these objectives.

Historical Context of Drug Pricing in India

India's journey with drug pricing control began in 1962 under the Defence of India Act, 1915, with the introduction of the Drugs (Display of Prices) Order, 1962.

This initial regulation was a response to the significant price hikes in medicines due to the Indo-China war. It led to the freezing of drug prices from the beginning of 1963, and subsequent price control orders were issued based on various principles over the years.

In December 2012, the National Pharmaceutical Pricing Policy (NPPP) marked a significant shift from cost-based to market-based pricing. This policy change aimed to establish a regulatory framework that was more responsive to market dynamics.

Following this, the government notified the Drugs (Prices Control) Order (DPCO) in 2013, which continues to guide drug pricing in India today.

Govt Initiatives to Boost Domestic Manufacturing

The Indian government has implemented various initiatives to encourage domestic manufacturing of drugs and medical devices.

The "Promotion of Medical Devices Parks" scheme provides financial assistance to states for setting up medical device parks with common facilities.

States including Uttar Pradesh, Tamil Nadu, Madhya Pradesh, and Himachal Pradesh have already received approval for such projects.

Additionally, the "Assistance to Medical Device Industry for Common Facility Centre" scheme has provided a grant to the Andhra Pradesh Medtech Zone (AMTZ) to establish superconducting magnetic coil testing and research facilities.

The central government has also introduced a production-linked incentive (PLI) scheme for medical devices, with a financial outlay of INR 3,420 Cr from FY 2020-21 to FY 2027-28.

This scheme offers financial incentives to companies based on the incremental sales of medical devices manufactured in India. It targets specific segments to boost domestic production and reduce import dependency.