Lok Sabha Question No. 973 (UNSTARRED), answered on 2020-02-07
Subject: Trade Margins on Drug Trade
Ministry: HEALTH AND FAMILY WELFARE
Asked by: S. Muniswamy, Malook Nagar

## GOVERNMENT OF INDIA MINISTRY OF HEALTH AND FAMILY WELFARE DEPARTMENT OF HEALTH AND FAMILY WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 973 TO BE ANSWERED ON 07 TH FEBRUARY, 20 20

## TRADE MARGINS ON DRU G TRADE

## 973. SHRI S. MUNISWAMY: SHRI MALOOK NAGAR:

Will the Minister of HEALTH AND FAMILY WELFARE be pleased to state:

- (a)  whether  the  Government  is  aware  that  some  private  and  Government  hospitals  and physicians prescribe costlier branded drugs to patients to benefit the respective drug c under  some  sort  of  nexus  between  drug  companies  and  medical  practitioners  despite  sim drugs being available at cheaper rates in market thereby resulting in heavy financial b patients and their families;

(b) the steps taken by the Government to determine the maximum retail price for similar drug

(c) whether the Government has any plan to set a cap on trade margins on drug sale to profiteering;

- (d) if so, the details thereof; and
- (e) the steps taken by the Government in this regard?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF HEALTH AND FAMILY WELFARE (SHRI ASHWINI KUMAR CHOUBEY)

(a): Clause 6.8 (Code of Conduct for doctors in their relationship with pharmaceutical allied health sector industry) of the Indian Medical Council (Professional Conduct, Etiquette Ethics) Regulations, 2002 prohibits doctors from taking gifts, travel facilities, hosp cash or monetary grants from pharmaceutical and allied health sector industry. Vi olation of these norms prescribes severe punishment as laid down in the said regulations.

Clause  1.5 alsoprescribes  that  every  physician  should  prescribe  drugs  with  gener names legibly and preferably in capital letters and he/she shall ensure that t here is a rational prescription and use of drugs. Further, Medical Council of India has issued Circulars from time to  time  directing all  the  Registered  Medical  Practitioners  to  comply  with  the  aforesa provisions.

(b):     The Department of Pharmaceutica ls, Ministry of Chemicals & Fertilizers informed that in accordance  with  the  provisions  of  the  Drugs  (Prices  Control)  Order,  2013  (DPCO,  201 , Government regulates the prices of medicines listed in Schedule I of the order. The Nation of Essential M edicines 2011 (NLEM - 2011) and subsequently NLEM - 2015 have been incorporated as Schedule - I  of  DPCO,  2013. As per para 8 of DPCO, 2013 the MRP of the formulations shall be fixed by the manufacturer on the basis of ceiling / retail price local tax es as applicable.

Ceiling  prices  of  medicines  included  in  Schedule -I  are  fixed  on  the  'Market  based pricing' methodology. National Pharmaceutical Pricing Authority (NPPA) has fixed the ceiling prices of 530 scheduled medicines under Original Schedule -I ( NLEM - 2011); and has also fixed the ceiling prices of 860 formulations under the Revised Schedule -I (NLEM - 2015).  The detail of prices fixed is available on NPPA 's website.

(c) to (e) : The  Department  of  Pharmaceuticals, Ministry  of  Chemicals  &  Fertilizers informed that the National Pharmaceutical Pricing Authority capped the Trade Margin of all t non- scheduled formulations of select 42 Anti - Cancer drugs, recommended by Expert Committee of  Ministry  of  Health  &  Family  Welfare,  under  the  'Trade  margin  Rationalisation  Approach' vide order S . O .1041(E) dated 27th February, 2019. The decision has been taken up as Pilot Proof of Concept, under the laid down provision of paragraph 19 of DPCO, 2013, under ex -ordinary circumstances in public interest. On the basis of data submitted by manufacturers, it has been analysed that there would be annual saving of approx. Rs. 984 crores to the patients. N PPA has  issued  necessary  directions  to  State  Drug  Controllers  and  Superintendents  of  Hospi Medical  Institutio ns  to  ensure  compliance  of  the  order  issued  so  that  the  benefits  under measure be available to the patients.

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