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Pharmaceutical sector; need for greater superintendence SEMINAR ON Feb 28 press club

Pharmaceutical sector; need for greater superintendence SEMINAR ON Feb 28 press club


Regulatory oversight on drug makers (drug companies), drug sellers (chemists) and drug prescribers (doctors) needs to increase. The pharmaceutical sector is regulated partly by ministry of chemicals and fertilizers and partly by the ministry of health and family welfare (MOHFW). The Medical Council of India needs to give way to an institution that better regulates the medical practice and education in India.  India needs to strengthen its drugs regulatory mechanism to ensure the quality of drugs sold locally, are as good as the ones that are exported. A legally binding directive to regulate marketing practices needs to be promulgated since the voluntary Uniform Code for Pharmaceutical Marketing Practices has proved to be ineffective. An effective way of improving access to medicines could be free distribution of all medicines through public hospitals. This has been successfully demonstrated in Tamil Nadu for the last two decades and in recent times in Rajasthan. An alternative procurement and distribution system does not only improve access, it can also be one of the most effective measures in controlling market prices and quality of medicines. 

 India currently imports nearly 80% of its active pharmaceutical ingredients from China. Such reliance on imports risks supply disruptions and price volatility. Making more ingredients domestically would help, but companies have struggled with inadequate infrastructure. They want more reliable water and electricity supply, expansion of special economic zones to facilitate international trade, and government support in the form of tax incentives, capital subsidies, and easier license renewals. A recent official gazette notification from MOHFW has stated that, from March 2021 onwards, Indian pharmaceutical companies that market drugs will be accountable for quality and other regulatory compliances along with the manufacturers. Non-compliance to quality standards is one of the biggest challenges faced by the Indian pharmaceutical sector. 

Drug Price Control Orders (DPCOs)

The issue of essentiality of medicines was brought back under the National Pharmaceutical Pricing Policy of 2012 (NPPP2012) and incorporated DPCO 2013 as all drugs under National List of Essential Medicines were brought under price control. Though this seems to be a major step in the right direction, the NPPP 2012 changed the entire formula of price control from a cost based formula to a market based one, where ceiling prices are determined on the basis of the average price of all brands of medicines, each having a market share of at least 1 percent, thus limiting the overall efficacy of price control.  The initial phases on price control, through various DPCOs, focused on fixing prices based on ex-factory costs of essential medicines and allowed a certain percentage of markups over it. In the 1970s and 1980s the approach gradually expanded to bring in pre-tax profits into consideration, evolve differential strategies based on degree of essentiality of the medicines, rationalization and quality control.  By the late 1980s as many as 342 drugs with 90 percent of market share was under price control.

Failure of National pharmaceutical pricing authority (NPPA)

Multiplicity of authorities, few testing labs, no coordination between state and central authorities, each state having its own drug laws slightly differently implemented leading to confusion galore, and no transparency in quality of people at the union and state health minister or health secretary levels with no fixed tenure of these high ranking posts continue to be the norm in every govt.

NPPA has no scientific method of fixing pharmaceutical drugs prices. When an application for pricing a drug by a new manufacturer comes up, the NPPA bosses take the average of the prices prevailing in the industry and ask the new entrant to follow that average price. This is arbitrary and is unfair to the consumer as well as drug houses, unless the quality and dosage are not standardized, before any product is allowed to be marketed. Also the price should be fixed after taking into account the cost of raw material, R& D expense, manufacturing and marketing cost and reasonable profits say 40% more than the cost.

UK’s National Health Service has a body called NICE or national institute of clinical excellence, which takes costing data from the various manufacturers and decides whether the production costs justify the drugs introduction in the market. If the costs outweigh the benefits of the drug and cheaper drugs are available to resolve the same problem, the new drug is not introduced on the basis of costing. Prices are not set arbitrarily like in India. The NICE people go into the details of manufacturing the product and the quality required. Only then do they justify the introduction of the drug, and give a commonsense price for reasonable profit to keep manufacturing sustainable

In India even banned drugs continue to be marketed e g Ranitidine is a drug banned everywhere in the world. In India, the drug controller general of India has asked the manufacturers to justify why the drug should be sold here and left the matter at that. Unnecessary and endless drug formulations have been approved -- 3000 plus exist in India as compared to few in the the essential medicines list as approved by WHO.


Superadded to lax regulation is lack of prosecutions despite best laws and even lower rate of convictions of those prosecuted. It is known that regulators enjoy absolute powers to thwart genuine manufacturers with no redress- mechanism. A drug testing or recall notice may be indefinitely continued by the regulator due to extraneous reasons. In case of generic medicines the difference in pricing and quality is marked. Same generic drug is priced differently by different manufacturers with differing quality control, which regulators don't want to standardize or price on actual field conditions. Epilepsy, heart failure, bipolar depression, schizophrenia, and arrhythmias are the 5 conditions that need best quality drugs, which justify higher priced drugs over lower priced unknown company drugs. The physicians may prefer a branded drug from well known drug house in these cases, rather than taking a chance.

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