As India's Supreme Court resumes its examination of the government's proposed new pharmaceutical policy, the World Health Organisation (WHO) has told the government that "a major problem exists" with its method of obtaining drug pricing data.
India uses data from IMS Health, which collects medicine volume and prices at one point in the supply chain, usually at the wholesaler level, says WHO, in its response to the government's draft National Pharmaceutical Pricing Policy (NPPP). While the volume data from IMS is reliable, its pricing data "does not take account of discounts, rebates and bundling deals," says the Organisation, adding that "when the data is collected at the level of the wholesaler [it estimates] the retailer and patient prices."
The WHO also tells the government that by limiting its pricing data collection to India only, it "may miss national anomalies in which specific high-volume products such as ciprofloxacin are charged at higher prices than in neighbouring countries such as Sri Lanka and Nepal."
Moreover, the agency is critical of the fact that the NPPP contains no commitment to placing drug pricing information in the public domain, which, it says, would make it impossible for companies and other organisations to check whether the officially-set ceiling price is in fact correct.
On January 17, the Supreme Court was due to resume its scrutiny of a Public Interest Ligitation (PIL) brought against the proposed NPPP by the All-India Drug Action Network (AIDAN) and others. The litigants claim that the government's plan to separate the ceiling prices of drugs from their bulk manufacturing costs would increase the prices of essential drugs, making them unaffordable for many people.
In its commentary on the NPPP, WHO tells India’s Ministers that ceasing to regulate the prices of active pharmaceutical ingredients (APIs) is "reasonable," although it also suggests that the government should monitor the prices of key APIs which are produced by a limited number of manufacturers, both in India and internationally, to ensure that a cartel does not develop which would push prices up.
It also queries the government's plan to freeze for two years those prices which have beenfixed under the current Drug Price Control Order (DPCO), not least because this would mean the current price system effectively remaining in place for a further two years, during which time the impact of the new price controls could not be measured.
WHO also takes issue with the government's plan to base the ceiling price for products within individual therapeutic groups on the group's biggest seller, pointing out that in India, drugs with the biggest volume sales are often the highest-priced, so such a policy would increase prices and establish incentives to raise prices progressively.
It also suggests that India needs a policy for negotiating the prices of new patented medicines at the time they receive their marketing authorization and that this should include pharmacoeconomic evaluation.