Parliamentary Standing Committee Report on Rising Medicine Prices

The Parliamentary Standing Committee on Chemicals and Fertilisers expressed concern over the lack of regulatory control on non-scheduled drugs, which may result in profiteering. The committee urged the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority (NPPA) to develop a policy to address this issue.

Key Findings and Recommendations

• The committee highlighted exorbitant markup rates for several drugs: 
  • Cetrizine: 953% markup (MRP Rs 21.06, stockist price Rs 2)
  • Pentoprazole: 920% markup (MRP Rs 102, stockist price Rs 10)
• Marginal rates for other common drugs were reported between 600% to 1800%.
• The price to stockists is undisclosed to the public, raising transparency concerns.
• The committee suggested linking GST to actual MRP to control prices and proposed a trade margin rationalisation policy to regulate profit margins across the supply chain.
• Successful trade margin regulation examples include: 
  • Anti-cancer drugs policy, reducing prices of nearly 500 brands by 50%, saving Rs 984 crore.
  • Cap on trade margin for medical devices during the COVID-19 pandemic, saving Rs 1,000 crore.

Drug Price Control Mechanism

• The current mechanism includes the Drug (Prices Control) Order 2013, which allows NPPA to set ceiling prices for scheduled drugs listed by experts.
• Prices of scheduled drugs are revised annually based on the Wholesale Pricing Index (WPI).
• Drugs not on the essential medicine list can have a maximum annual price increase of 10%.
• Non-scheduled drugs’ average price increase over five years was 5.6% per year, below the permissible limit.
• The NPPA currently has no control over initial drug pricing, leading to potential loopholes in profit margin regulation.

Concerns and Further Recommendations

• Rising prices of stents and anti-cancer drugs were noted, with the committee questioning reliance on inputs from the Indian Pharmaceutical Alliance (IPA) due to potential bias.
• Price increase for stents was significant (44% for bare metal stents and 29% for drug-eluting stents from 2017 to 2024).
• The committee advocated for a robust pricing data collection mechanism and strict monitoring of online platforms selling discounted cancer drugs to ensure authenticity.