(a) whether the domestic as well as foreign pharmaceutical companies
in the country are not lowering the prices of drugs despite availing
rebate in excise duty;
(b) if so, the details of thereof alongwith the reasons therefor;
(c) whether the said companies lure doctors and ask them to
prescribe costly and unwanted drugs;
(d) if so, the details thereof; and
(e) the nature of directions proposed to be given by the Government
to the said companies for lowering the prices of drugs?
MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS
(SHRl SRIKANT KUMAR JENA)
(a) & (b) Under the provisions of the Drugs (Prices Control) Order, 1995
the prices of 74 bulk drugs and the formulations containing any of these
scheduled drugs are controlled. NPPA / Govt. fixes or revises prices of
scheduled drugs / formulations as per the provisions of the DPCO, 1995,
NPPA monitors prices of all formulations including imported scheduled
formulations under price control. Under the DPCO, no person can sell any
formulation (medicine) of price controlled category to a consumer at a
price exceeding the price notified/ approved by the NPPA/ Government. In
case, a company is found selling at prices higher than the price notified/
approved by the NPPA/ Government, action is taken against them as per the
provisions of the DPCO, 1995.
States like Himachal Pradesh, Uttrakhand, Jammu & Kashmir, Sikkim,
North Eastern States and Union Territory of Daman & Diu have different
scheme of excise duty exemption. It has come to the notice of NPPA that
certain Pharma Companies located in J&K and Sikkim are charging excise
duty from the consumers over and above the notified ceiling prices of
scheduled formulations, which is refunded to them. The companies cannot
be allowed to load such excise duty which is refunded to them in the price
to gain unjust and unauthorized benefit at the cost of consumers. Based on
the available sale details, demand notices for overcharged amount and
interest thereon have been issued to the defaulter companies.
In respect of drugs - not covered under the Drugs (Prices Control)
Order, 1995 i.e. non-scheduled drugs, manufacturers fix the prices by
themselves without seeking the approval of Government / NPPA. Such prices
are normally fixed depending on various factors like the cost of bulk drugs
used in the formulation, cost of excipients, cost of R&D, cost of utilities /
packing material, sales promotion costs, trade margins, quality assurance cost,
landed cost of imports etc.
As a part of price monitoring activity, NPPA regularly examines the
movement in prices of non-scheduled formulations. The monthly reports of ORG
IMS (now renamed as IMS Health) and the information furnished by individual
manufacturers are utilized for the purpose of monitoring prices of non-
scheduled formulations. Wherever a price increase beyond 10% per annum is
noticed, the manufacturer is asked to bring down the price voluntarily
failing which, subject to prescribed conditions, action is initiated under
paragraph 10(b) of the DPCO, 1995 for fixing the price of the formulation
in public interest. This is an ongoing process.
(c) to (e) : There were some reports in the news paper regarding promotional
expenses being made by the Pharma Companies. That reports suggested that some
unethical marketing practices are being followed by certain pharma companies.
Keeping in view the allegations made in the media reports, this Department
felt the need to take up the matter in the interest of the consumers/patients
as such promotional expenses being extended to doctors had direct implications
on the pricing of drugs and its affordability. After discussing the issues with
the Pharma Associations/Industry, this Department has been able to persuade most
of the associations to have code of ethics. The Department is now examining the
possibility of framing a Uniform Code of Pharmaceutical Marketing Practices
(UCPMP) which would be in the first instance be adopted voluntarily.