India has tightened new legislation that demands pharma companies seek a recommendation from the country’s price regulator before marketing a new medicine.
The National Pharmaceutical Pricing Authority (NPPA) has confirmed that its Drugs (Prices Control) Order 2013, which allows the Government to control the price of ‘essential medicines’ in the country, will include new drug combinations and dosages.
A statement issued by the NPAA defines a ‘new’ medicine as: “a formulation launched by an existing manufacturer of a drug of specified dosages and strengths as listed in the National List of Essential Medicines (NLEM) by combining the drug with another drug either listed or not listed in the NLEM or a formulation launched by changing the strength or dosages or both of the same drug of specified dosages and strengths in the NLEM.”
The essential medicines list was expanded last year from 74 medicines to 348, including cancer and HIV treatments. For drugs on this list, the Government is able to impose price controls based on the weighted average price of all brands that have at least 1% market share.
Companies have intended to circumvent this definition by launching newer combinations of drugs that involve changes to existing price-controlled medicines and also adjusting strengths and dosages.
The new definition should help stem these activities and give India greater control over the pricing of medicines in the country.
Speaking to local newspaper the Times of India, the NPAA said the new rules will help the country keep a check on innovative branding and marketing strategies of pharmaceutical companies to circumvent price control.
The change brings India more in line with most European nations, which tend to have a health technology assessment (HTA) process in place to determine that a drug is cost-effective for national reimbursement once the European Commission has approved a product as safe and effective.