Source: The Hindu

Disclaimer: Copyright infringement not intended.

Context

• The National Pharmaceutical Pricing Authority (NPPA) enforced an increase in the Maximum Retail Price (MRP) of essential medicines, effective from April 1.
• The Department of Pharmaceuticals issued a revised list of ceiling prices for 923 scheduled drug formulations and retail prices for 65 formulations, aligning with the annual change in the WPI.

Details

Key Points

• Price Revision: The increase in prices is based on the WPI data provided by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. The NPPA approved the increase of 0.00551% for scheduled medicines during its meeting held on March 20.
• Impact on Prices: The price hike affects antibiotics, painkillers, and other essential drugs. However, the government assures that the increase will be marginal, minimizing the impact on consumers. Currently, India has around 400 molecules and 960 formulations listed under the National List of Essential Medicines.
• Regulatory Framework: The NPPA regulates drug pricing under the Drugs (Prices Control) Order (DPCO) 2013, ensuring affordability and accessibility. Scheduled drugs, which constitute essential medicines, are subject to price regulation.
• Price Control Measures: The DPCO allows for annual price revisions based on changes in the WPI index. Manufacturers may increase the MRP of scheduled formulations without prior approval from the government, provided it aligns with the approved WPI increase.
• Industry Concerns: Pharmaceutical companies express concerns over high input costs, stringent price controls, and diminishing profit margins. The marginal hike in drug prices has led some companies to discontinue the production of economically unviable drugs.
• Import Dependence: India's pharmaceutical industry heavily depends on China for supplies of bulk drugs and drug intermediates. This dependence poses challenges, especially during crises like the COVID-19 pandemic.

About National List of Essential Medicines (NLEM)

• The National List of Essential Medicines (NLEM) is a comprehensive list of medicines released by the Ministry of Health and Family Welfare in India.
• These medicines are deemed essential for the safe and effective treatment of priority disease conditions within the population.

History:

• The first NLEM was prepared and released in 1996, consisting of 279 medicines.
• Subsequent revisions occurred in 2003, 2011, 2015, and 2022, reflecting changes in disease burden and advancements in healthcare.

Purpose:

• Guide safe and effective treatment of priority disease conditions.
• Promote the rational use of medicines.
• Optimize available health resources.
• Serve as a guiding document for state governments to prepare their own lists of essential medicines.
• Facilitate procurement and supply of medicines in the public sector.

Criteria for Inclusion:

• Essentiality: Medicines must be essential for the population at large.
• Changing Disease Burden: Consideration of prevalent diseases and shifting priorities.
• Efficacy and Safety: Medicines must have unequivocal evidence of efficacy and safety.
• Cost-Effectiveness: Total treatment cost is evaluated, not just unit price.
• Fixed Dose Combinations (FDCs): Only included if proven advantageous in therapeutic effect.
• Turnover: High sales turnover alone is not sufficient for inclusion.

Deletion Criteria:

• Medicines are deleted if banned in India or if safety concerns arise.
• Removal may occur if a medicine with better efficacy, safety, and cost-effectiveness becomes available.

Essential Medicine List (EML)

• The Essential Medicine List (EML) is a compilation of medications deemed crucial for addressing priority health needs within a population.
• These medicines are selected based on factors such as disease prevalence, efficacy, safety, and cost-effectiveness, with the aim of ensuring their accessibility and affordability to individuals and communities.
• In 1963, Cuba was the first country to launch a list of basic medicines. This was followed by the introduction of national lists in Tanzania (1970) and Peru (1972). In 1977, World Health Organization (WHO) published the first WHO Model List of 212 essential medicines.
• A WHO Expert Committee on the Selection and Use of Essential Medicines is responsible for the development and the revision of Essential Medicines List (EML) every 2 years.
• The Nairobi Conference on the Rational Use of Drugs, held in 1985, was the first international conference on essential medicines policies. The development and implementation of Essential Medicines Policies (EMPs) evolved in three periods, that is, 1st era from 1970s to 1990s, 2nd era from 1990s to 2010s and 3rd era from 2010 to present.
• Essential medicines were defined as those "of utmost importance, basic, indispensable, and necessary for the health and needs of the population," with selection criteria based on efficacy, safety, quality, and total cost.

Key Features:

• Disease Prevalence: Medicines address prevalent health conditions within the population.
• Efficacy: Medicines must be effective in treating targeted diseases.
• Safety: Medicines should have a favorable safety profile.
• Cost-Effectiveness: Affordability and cost-effectiveness are considered to ensure accessibility.
• Accessibility: Medicines should be available to individuals and communities, enabling easy procurement and affordability.

WHO's Role:

• The WHO EML is updated every two years by the Expert Committee on Selection and Use of Essential Medicines.
• The committee assesses new evidence on efficacy, safety, and cost-effectiveness to determine inclusion or removal of medicines from the list.
• The WHO provides technical assistance to member states in the development and implementation of their own EMLs, tailored to their specific health needs and priorities.

About National Pharmaceutical Pricing Authority (NPPA)

• The National Pharmaceutical Pricing Authority (NPPA) was established by the Government of India in 1997 as an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers.
• It functions as an independent regulator tasked with the pricing of drugs to ensure the availability and accessibility of medicines at affordable prices.

Mandates:

• Implementation of Drugs (Prices Control) Order: The primary mandate of the NPPA is to implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
• Legal Matters: The NPPA deals with all legal matters arising out of its decisions, ensuring adherence to regulatory guidelines.
• Monitoring Drug Availability: It monitors the availability of drugs, identifies shortages, and takes remedial steps to address any issues concerning accessibility.
• Data Collection and Analysis: The NPPA collects and maintains data on various aspects of the pharmaceutical industry, including production, exports, imports, market share of companies, and profitability. It also sponsors relevant studies on drug pricing and pharmaceuticals.

Pricing Mechanism:

• All medicines listed in the National List of Essential Medicines (NLEM) are subject to price regulation by the NPPA.
• The Health Ministry prepares a list of drugs eligible for price regulation, which is then incorporated into Schedule 1 of the Drugs (Prices Control) Order by the Department of Pharmaceuticals.
• The Standing Committee on Affordable Medicines and Health Products advises the NPPA on vetting the list. Subsequently, the NPPA fixes the prices of drugs listed in Schedule 1.
• Under the Drugs (Prices) Control Order 2013, scheduled drugs, constituting about 15% of the pharmaceutical market, are allowed an increase based on the Wholesale Price Index (WPI), while the remaining 85% receive an automatic increase of 10% annually.
• The annual change in prices of scheduled drugs is controlled and typically does not exceed 5%.

About Drug Price Control Order (DPCO)

• The Drugs Prices Control Order, 1995 is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
• The Order provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Government, penalties for contravention of provisions etc.
• For the purpose of implementing provisions of DPCO, powers of Government have been vested in NPPA.
• Later, the Drugs (Prices Control) Order (DPCO) 2013 was notified.

Need for DPCO:

• Ensures affordability and accessibility of essential drugs for all sections of society.
• Prevents pharmaceutical companies from charging exorbitant prices for essential drugs.
• Helps in maintaining public health by ensuring access to necessary medications without financial hardship.
• Strikes a balance between reasonable profits for pharmaceutical companies and affordable drug prices for the public.
• Corrects market failures in the pharmaceutical sector and promotes competition among companies.

List of Products Covered:

• Essential Medicines: Includes drugs listed under the National List of Essential Medicines (NLEM) for critical diseases like diabetes, hypertension, cardiovascular disorders, respiratory diseases, etc.
• Life-saving Drugs: Used to treat life-threatening diseases such as cancer, HIV/AIDS, tuberculosis, hepatitis, etc.
• Generic Medicines: Generic versions of branded drugs that offer cost-effective alternatives.
• Medical Devices: Certain critical medical devices like cardiac stents, intraocular lenses, orthopedic implants, etc.
• Bulk Drugs: Active Pharmaceutical Ingredients (APIs) used in the production of various formulations and medicines.

Sources:

The Hindu

NPPA

Dept of Pharma

Science Direct

Vikaspedia

PRACTICE QUESTION Q.  The NLEM plays a crucial role in ensuring access to essential medicines for the population while promoting rational use and efficient allocation of healthcare resources.  Discuss. (150 Words)