GoI invokes DPCO, 2013 for the first time
On December 13, 2019, the Government of India for the first-time invoked Drug Price Control Order, 2013 in order to increase the prices of 21 medicines to ensure their availability. The prices were increased by 50%. These medicines were under price regulation as majority of their ingredients were imported from China.
Background of the issue
In the past two years, pharma industry was complaining over the price rise of Active Pharmaceutical Ingredients (API). The prices have gone up by 5% to 88%. These ingredients constitute 40% to 80% of formulation cost. However, due to price ceiling of GoI, the sales of these products in the country got affected greatly as the pharmaceuticals hesitated to sell or manufacture these products.
The price rise has been done on 21 key formulations namely BCG vaccines, malaria, penicillin, leprosy medicine, common antibiotics, anti-allergy medicines, life saving drugs like Furosemide. In January 2019, NPPA (National Pharmaceuticals Pricing Authority) received 49 application for 72 drugs. It was referred to Standing Committee on Affordable Medicines and Health Products (SCAMHP), NITI Aayog. The SCAMPH recommended that there is a need for one-time hike in prices in these formulations by 50%.
Paragraph 19 of the DPCO 2013 deals with increase or decrease in drug prices under extraordinary circumstances. The prices have been increased under this legislation.