Lok Sabha Question No. 292 (STARRED), answered on 2022-08-05
Subject: Anomalies in Prices of Medicines
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Heena Vijaykumar Gavit, Krishna Pal Singh Yadav

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA STARRED QUESTION No. 292 TO BE ANSWERED ON THE 5 th  AUGUST, 2022

## Anomalies in Prices of Medicines

## *292.   DR. HEENA GAVIT:

## DR. KRISHNA PAL SINGH YADAV:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether the Government has taken/proposes to take any concrete measures to facilitate the pharma sector in the country and if so, the details thereof, State/ UT-wise including the State of Uttar Pradesh;
- (b) whether the Government has taken serious note of the anomalies in prices as well as quality of certain medicines marketed by different pharma companies under different brand names and if so, the
- details thereof;
- (c) the details of the total quantity and value of drugs/medicines imported and exported during the last three years; and
- (d) the details of the steps taken by the Government to reduce the dependence on imported drugs and increase the indigenous production in the country?

## ANSWER

## MINISTER IN THE MINISTRY OF CHEMICALS & FERTILIZERS (DR. MANSUKH MANDAVIYA)

(a) to (d):

A statement is laid on the Table of the House.

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  STARRED QUESTION NO. 292 FOR REPLY ON 05.08.2022

(a)  &  (d):    The  Government  of  India  has  taken  several  measures  to  encourage  domestic manufacturing of Pharmaceutical drugs including bulk drugs to reduce import dependence and to  establish  a  dominant  position  in  the  global  market.  The  Programmatic  interventions  to support Pharma Industries are as follows;

- (i) The Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India, with a financial outlay of Rs. 6,940 crores  and  the  tenure  from  FY  2020-2021  to  FY  2029-30,  provides  for  financial incentive for 41 identified products. A total of 51 applicants have been selected under the scheme.
- (ii) The Production Linked Incentive Scheme for Pharmaceuticals, with a financial outlay Rs. 15,000 crores and the tenure from FY 2020- 2021 to FY 2028-29, provides for financial incentive to 55 selected applicants for manufacturing of identified products under three categories for a period of six years.
- (iii) The Scheme for Promotion of Bulk Drug Parks, with a financial outlay of Rs. 3,000 crores  and  the  tenure  from  FY  2020-2021  to  FY  2024-25,  provides  for  financial assistance to three States for establishing Bulk Drug Parks. The proposals received are under evaluation.
- (iv) The Department has launched the scheme of Strengthening of Pharmaceutical Industry (SPI), with a financial outlay of Rs. 500 crores and the tenure from FY 2021-2022 to FY 2025-26 and this scheme has three components, to provide infrastructure support for pharma MSMEs in clusters and to address the issues of technology upgradation of individual  pharma  MSMEs. Applications are invited under the scheme components (Assistance to Pharmaceutical Industry for Common Facilities (API-CF) from eligible clusters  and  Pharmaceutical  Technology  Upgradation  Assistance  Scheme  (PTUAS) from eligible MSME units) since 1.8.2022.

Further,  under  non-schematic  interventions,  in  order  to  attract  investments  in  this sector, the Government has allowed 100% FDI in pharma sector for greenfield projects under automatic route. For the brownfield projects, upto 74%, FDI investments are allowed under automatic route and beyond 74% to 100%, FDI investments are allowed under government approval route.

(b):    As per the provisions of Drugs (Prices Control) Order, 2013 (DPCO, 2013), the ceiling price of scheduled formulations as per Schedule-I of DPCO, 2013 based on the National List of  Essential  Medicines  (NLEM) is fixed by the  National Pharmaceutical Pricing Authority (NPPA) under the Department of Pharmaceuticals. All manufacturers of scheduled medicines are required to sell their products within the ceiling price (plus applicable taxes) fixed by the NPPA.  NPPA  also  fixes  retail  price  of  a  new  drug  under  DPCO,  2013  for  existing manufacturers of scheduled formulation.

In  respect  of  non-scheduled  formulations,  a  manufacturer  is  at  liberty  to  fix  its Maximum  Retail  Price  (MRP).  However,  a  manufacturer  of  a  non-scheduled  formulation (including new drug) cannot increase the price by more than 10% of what was prevalent during the preceding 12 months.

Annual  revision  of  ceiling  prices  of  scheduled  medicines  is  permissible  based  on Wholesale Price Index (WPI) for all commodities for the preceding calendar year.

Further, 10% increase in MRP in case of non-scheduled drugs and WPI increase in case of scheduled drugs is the maximum increase permissible, which may or may not be availed by the  manufacturers.  The  manufacturers  decide  the  market  price  based  on  market  dynamics, within the ceiling or retail price, wherever prescribed, by NPPA.

In  view  of  this,  though  the  prices  are  regulated  under  DPCO,  2013,  the  prices  for medicines may vary among different pharma companies as far as there is no violation of prices fixed by NPPA and the prices are increased within the prescribed limits.

## Action taken so far under by NPPA are given below:

- i. Ceiling  prices  of  890  scheduled  formulations  across  various  therapeutic  categories including scheduled medical devices, i.e., Intra Uterine Devices (Hormone releasing IUD & IUD containing Copper), condoms and coronary stents (Bare metal stents and Drug Eluting Stents) have been fixed by NPPA.
- ii. Retail price of approx. 2023 new drugs under DPCO, 2013 till 12.07.2022 have been fixed.
- iii. In 2014, NPPA capped the MRP of 106 non-scheduled drug formulations under Para 19 of DPCO 2013 which includes 22 diabetic and 84 cardiovascular drugs.
- iv. Ceiling price of Orthopaedic Knee Implants fixed under Para 19 of DPCO, 2013 in August 2017 in public interest.
- v. Capped  Trade  Margin  of  non-scheduled  formulations  of  42  select  Anti-cancer medicines  as  a  pilot  for  proof  of  concept  wherein  price  of  above  500  brands  of medicines were reduced upto 90%.
- vi. Paragraph  19  of  the  DPCO,  2013  was  invoked  to  regulate  the  price  of  Oxygen Concentrators,  Pulse  Oximeter,  Blood  Pressure  Monitoring  Machine,  Nebulizer, Digital Thermometer and Glucometer under 'Trade Margin Rationalization' Approach in June/July 2021.

As per the information received from Central Drugs Standard Control Organisation (CDSCO), CDSCO and Ministry of Health and Family Welfare have taken various regulatory measures to ensure the quality of medicines in the country. Major such reforms are as under: -

- i. The  Drugs  and  Cosmetics  Act,  1940  was  amended  under  Drugs  &  Cosmetics (Amendment) Act, 2008 to provide stringent penalties for manufacture of spurious and adulterated drugs. Certain offences have also been made cognizable and non-bailable.
- ii. The States / UTs were requested to set up special Courts for trial of offences under the Drugs and Cosmetics Act for speedy disposal. So far, 33 States have already set up designated special Courts.
- iii. The  number  of  sanctioned  posts  in  Central  Drugs  Standard  Control  Organization (CDSCO) has been increased from 111 in 2008 to 478 till January 2022 and 220 posts have recently been created on 27-06-2022.
- iv. The testing capacities of Central Drugs Testing Laboratories under CDSCO are being constantly strengthened to expedite testing of drug samples in the country.
- v. On 3.4.2017, in order to ensure efficacy of drugs, the Drugs and Cosmetics Rules, 1945 have been amended providing that applicant shall submit the result of bioequivalence study along with the application for grant of manufacturing license of oral dosage form of  drugs  falling  under  the  Category  II  and  Category  IV  of  the  Biopharmaceutical Classification System.
- vi. On 27.10.2017, the Drugs and Cosmetics Rules, 1945 have been amended vide Gazette notification  no.  G.S.R.  1337  (E)  making  it  mandatory  that  before  the  grant  of
7. manufacturing license, the manufacturing establishment is to be inspected jointly by the  Drugs  Inspectors  of  Central  Government  and  State  Government.  The  licensed manufacturing premises shall be inspected jointly by the Drugs Inspectors of Central Government and State Government to verify the compliance with the conditions of license and the provisions of the Drugs & Cosmetics Act and Rules for not less than once in three years or as needed as per risk-based approach.
- vii. On 10.04.2018, the Drugs and Cosmetics Rules, 1945 have been amended vide Gazette notification no. G.S.R. 360 (E), making it mandatory for all drugs, that the applicants shall  submit  evidence  of  stability,  safety  of  excipients  etc.  to  the  State  Licensing Authority before grant of product manufacturing license by the Authority.
- viii. Draft Rules have been published vide GSR 999 (E), dated 05.10.2018 to amend the Schedule-M of the Drugs and Cosmetics Rules, 1945 to make it more comprehensive at par with the WHO-GMP guidelines.
- ix. The Government had approved a proposal for strengthening the drug regulatory system in  the  country,  both  at  the  level  of  Central  and  the  State  Governments  at  a  total expenditure of Rs.1750 crores.  Out of this, Rs. 900 crore was for strengthening the central  drug  regulatory  structures  and  Rs.850  crore  was  for  strengthening  the  drug regulatory system in the States. During the years 2016-17 and 17-18, Rs. 128.39 crore was  released  under  the  Central  component  whereas  Rs.  87.90  crore  was  allocated during 2018-19 under this component. Rs. 82.90 crore was allocated during the year 2019-20. Under the State component, Rs. 81.36 crore was released during 2016-17 and 17-18 whereas Rs. 206 crore was allocated during 2018-19 under this component.
11. (c):  The quantity and the value of the drugs exported and imported during the last three years is as under: -

| Export and Import of Drugs and Pharmaceuticals   | Export and Import of Drugs and Pharmaceuticals   | Export and Import of Drugs and Pharmaceuticals   | Export and Import of Drugs and Pharmaceuticals   | Export and Import of Drugs and Pharmaceuticals   |
|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|
|                                                  | Export                                           | Export                                           | Import                                           | Import                                           |
| Year                                             | Quantity (MT)                                    | Value (In Rs Cr)                                 | Quantity (MT)                                    | Value (In Rs Cr)                                 |
| 2019-20                                          | 524757                                           | 1,40,537                                         | 386186                                           | 40,139                                           |
| 2020-21                                          | 642718                                           | 1,74,064                                         | 403878                                           | 46,808                                           |
| 2021-22                                          | 1075906                                          | 1,75,040                                         | 423966                                           | 60,060                                           |

Source:

DGCIS, Ministry of Commerce and Industry.

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