New Delhi: The Organisation of Pharmaceutical Producers of India (OPPI), which represents prominent multinational pharma companies, has sought exemption for patented and orphan drugs from the government-set price controls, people in the know told ET.
It has asked the government to do away with the existing practice of 50% price cuts upon patent expiry, arguing that the government’s price-setting provisions will stymie innovation.
In a recent meeting held with the Department of Pharmaceuticals (DoP), the OPPI also sought exemption from price controls for drugs used for rare diseases.
Last year, in May, the National Pharmaceutical Pricing Authority (NPPA) notified that the ceiling price of the drugs going off patent will be reduced by 50% to curb profiteering by pharmaceutical companies. It was decided that the drug pricing regulator will take the market data and fix a new price after one year.
“The move has hit the companies hard as the NPPA has taken away the option from them to reduce the prices on their own,” a company executive said, requesting anonymity. “It will now be mandatory for the company to reduce the price to 50% once the patent expires. Earlier, the company had an option to continue with the same price till generic products hit the market,” he said.
It is learnt that in a meeting held last week, the OPPI suggested that DoP amend Para 32 (i) to “exclude all from operation of DPCO till the expiry of the patent term in India. Para 32 of the DPCO gives powers to the NPPA to exempt certain classes of drugs from price control for a period of five years. It says that the price cap won’t apply if a new drug is developed through a unique and indigenous process, is patented under the Indian Patents Act, and is not produced elsewhere.
It has also asked the DoP that ceiling prices of patented drugs should only be fixed after expiry of the patent and by using the provisions of market-based pricing and that there should not be any “arbitrary” 50% price cuts upon patent expiry.
According to OPPI, patents and other intellectual property protections are required to provide economic incentives to inventors.
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