01 July, 2006

The draft National Pharmaceutical Policy, 2006 seeks to strengthen the Drug Regulatory System and the patent office. It focuses on research and drug development with clinical trials. The policy lays emphasis on developing human resources in pharmaceutical sciences by opening more institutions on the pattern of the National Institute of Pharmaceutical Education and Research (NIPER). The policy aims at providing a better access to anti-cancer and anti-HIV/AIDS drugs to the patients. The Minister for Chemicals and Fertilizers and Steel, Shri Ram Vilas Paswan, announced this at a meeting of the Parliamentary Consultative Committee attached to his Ministry here today.

Shri Paswan said the draft National Pharmaceutical Policy, 2006 seeks to rationalise the excise duty on pharmaceuticals. It also seeks to streamline the system of bulk procurement of drugs by the Government besides promoting the generic medicines. The Minister said consumer awareness campaigns would be launched to educate the masses on the new policy. Drugs would be made available to the poor, especially the families living below the poverty line. He said the new policy encourages production of critical bulk drugs in India with emphasis on good manufacturing practices. There would be a Settlement Commission for settling old dues under the Drugs (Prices Control) Order, 1979. A Drug Price Monitoring Awareness and Accessibility Fund (DPMAA Fund) would be set up along with pharma parks. Shri Paswan said the policy lays greater thrust on pharma exports and on improving the retail system for an efficient network for distributing drugs. A Pharmaceutical Advisory Forum would be set up at the national level besides an advisory committee in the National Pharmaceutical Pricing Authority(NPPA) at its head office and five in different regions. These would be headed by the NPPA Chairman.

The Minister informed the MPs that in addition to the existing 74 drugs and their formulations, the 354 drugs with specified strength as mentioned in the National List of Essential Medicines (NLEM), 2003 have also been included in the draft Pharmaceutical Policy. Apart from the cost plus method, other systems of price control like negotiated prices, differential prices, reference prices and bulk purchase price have also been proposed. He said the raw material cost would be obtained from the manufacturers, central public enterprises in the pharmaceutical sector, import data and market sources.

Shri Paswan disclosed that the Maximum Allowable Post-manufacturing Expenses(MAPE), presently 100 per cent over the manufacturing cost, is proposed to be revised as follows:

(a) 150% in general

(b) 50% additional MAPE for R&D intensive companies which fulfill the laid down standards.

(c) For existing 74 drugs under price control MAPE would continue to remain at 100% for one year in order to avoid a sudden increase in prices. It would be increased thereafter on the above pattern.

(d) Based on the given percentage of MAPE, prices would be fixed for all drugs in the cost plus price control system. Wherever possible ceiling prices would be fixed.

(e) Maximum Retail Price (MRP) would be inclusive of all taxes as in the case of all other packaged commodities.

(f) Some exemptions have been provided for certain drugs from the price control-new drugs developed in India through product patent, process patent and new drug delivery systems would be exempted from price control for 5 years. This will boost R&D in India. Simultaneously, vaccines and biological drugs, drugs for sale to hospitals only, drugs whose MRP is at Rs. 1 per capsule / tablet and generic formulations fulfilling the prescribed norms would be exempted.

(g) A new Drugs (Prices Control) Order would be issued under the Essential Commodities Act 1955 to replace the existing DPCO, 1995.

(h) Re-structuring and strengthening of the National Pharmaceutical Pricing Authority (NPPA) - greater computerization and better monitoring.

(i) Price Monitoring Cells in the State Drug Controller Offices with funding from Government of India.

(j) Drugs (Price Management and Distribution) Act to be enacted for effective regulation of drug prices and for handling health emergencies - it will also provide compounding of minor offences.

(k) Trade Margins on generic-generic drugs, would be fixed (15% - wholesalers and 35%-retailers).

(l) Change in the name of Department of Chemicals and Petrochemicals to reflect Pharmaceuticals also (Name proposed is - Department of Chemicals, Petrochemicals and Pharmaceuticals).

(m) Draft policy along with Cabinet Note has been circulated to all Departments for their comments. On receipt of their comments it would be put up before the Cabinet.