NEW DELHI: The government plans to cap trade margins to make drugs cheaper, replace brand names with salt names for generic drugs, clamp down on unfair marketing practices and boost local manufacturing to reduce dependence on imports, according to government's draft national pharmaceutical policy.
The draft, prepared by the
pharmaceuticals
department, also suggests restructuring of the
National Pharmaceutical Pricing Authority
to strengthen the price regulatory mechanism.
It highlights the high trade margins and bonus offers by stockists, distributors and retailers, which hit the industry and consumers.
The draft policy said, "After detailed stakeholder consultations, the level of trade margins will be prescribed to create a level playing field for the Industry and to bring down prices."
"Institutions receiving supplies directly from manufacturers/distributors or retailers will also be covered under the trade margin reforms," it said.
In its effort to promote generic medicines, the draft proposes that public procurement and dispensing of
medicines
to be of generic drugs in salt names. "Giving brand names to generic drugs hampers real innovation and shall be discouraged... To facilitate this, the government will pursue the policy of sale of single ingredient drugs by their pharmacopeial name/salt name. To keep the identity of the manufacturer, the manufacturer would be allowed to stamp its name on the drug package. For patented drugs and Fixed Dose Combination (FDCs) drugs, brand names may be used. However here, the principle of 'one company-one drug-one brand name-one price' would be implemented," it said.
It also proposes e-prescription to aid and assist the registered medical practitioners in prescribing medicines in the generic names. E-prescriptions will be put into operation whereby the prescriptions will be computerised and the medicine name will be picked up from a drop down menu of salt names.
Once implemented, the proposed policy is expected to address the current challenges of the pharmaceutical industry and make essential medicines more affordable. It is also likely to give more powers to the government on deciding price of medicines over the pricing regulator
NPPA
.
As per the draft policy, the government will decide on the drugs to be subjected under price control, while NPPA will be responsible for laying down the price ceilings of selected medicines, enforcement of those price ceilings and ensuring that medicines are available in the market in adequate quantities.
Prices once fixed by the NPPA shall not be revised by the regulator unless directed specifically by the government or a higher court to do so, according to the draft.
Strengthening the regulatory mechanism, it suggests NPPA be assisted by an advisory body for pricing, nominated by the government. "The body will consist of doctors, pharmacists, other experts, civil society representatives, industry representatives and government representatives. The advice of this body will be recommendatory and the NPPA may accept or modify the advice rendered. While modifying/rejecting its advice, the NPPA will assign reasons in writing for doing so," the draft said.
"The regulator and the government would be two distinct agencies. The government shall not be the regulator and the regulator shall not be the government," the draft policy said.
The draft policy also laid down several other policy prescriptions that include enhancing quality standards, reining in unfair trade practices, faster approvals, boosting indigenous manufacturing and encouraging research and development.
The department has sought comments from the industry on the draft, after which it will be tabled before the Cabinet.