The National Pharmaceutical Pricing Authority (NPPA) plays important role in regulating drug prices in India. Established under the Department of Pharmaceuticals, it ensures that essential medicines remain affordable for the public. This is particularly for cancer treatments, where costs can be prohibitively high.
Role of NPPA in Drug Pricing
The NPPA fixes ceiling prices for drugs listed in Schedule-I of the Drugs (Prices Control) Order, 2013 (DPCO, 2013). Manufacturers must sell these scheduled medicines at or below the ceiling price set by NPPA. For new drugs, NPPA also determines the retail price that manufacturers must adhere to. Non-scheduled drugs allow manufacturers more freedom in pricing but restricts price increases to a maximum of 10% annually.
National List of Essential Medicines
The National List of Essential Medicines (NLEM) is very important in determining which drugs are priced under NPPA guidelines. The NLEM, updated in 2022, includes 63 anti-cancer drugs, which are vital for patient care. This list aims to ensure that essential medicines are available and affordable to the population.
Impact on Cancer Drug Affordability
NPPA has implemented measures to make cancer drugs more accessible. The ceiling prices for 131 scheduled anti-cancer formulations have been set, resulting in an average price reduction of 21%. This has led to annual savings of approximately ₹294.34 crore for patients. Additionally, NPPA has capped trade margins on non-scheduled anti-cancer medicines, further reducing costs by about 50%.
Tax Benefits and Financial Assistance
The government has reduced customs duty and GST on select anti-cancer drugs to nil and from 12% to 5% respectively. This tax relief is intended to lower retail prices, benefitting consumers directly. Furthermore, financial assistance is available for low-income families through various schemes, including the Health Minister’s Cancer Patient Fund.
Production Linked Incentive Scheme
To boost domestic drug manufacturing, the Department of Pharmaceuticals has introduced the Production Linked Incentive (PLI) Scheme. With a financial outlay of ₹15,000 crore, this initiative aims to enhance the production of 54 anti-cancer drugs, thereby increasing availability and reducing costs in the long run.
Additional Healthcare Initiatives
Under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), families receive health insurance coverage of ₹5 lakh for hospitalisation. This scheme covers various treatments, including medications for cancer. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana also provides affordable medicines through Jan Aushadhi Kendras, offering prices 50% to 80% lower than branded alternatives.
Conclusion of Financial Support Schemes
The Rashtriya Arogya Nidhi and Health Minister’s Discretionary Grant (HMDG) provide additional financial support to patients with life-threatening diseases. Assistance can reach up to ₹15 lakh for cancer treatment, ensuring that cost does not deter access to necessary healthcare.
Questions for UPSC:
- Discuss the implications of the National Pharmaceutical Pricing Authority’s pricing policies on public health.
- Critically examine the role of the National List of Essential Medicines in ensuring drug affordability.
- Explain the significance of the Production Linked Incentive Scheme for the pharmaceutical industry in India.
- With suitable examples, discuss the impact of government initiatives on access to affordable cancer treatment in India.
Answer Hints:
1. Discuss the implications of the National Pharmaceutical Pricing Authority’s pricing policies on public health.
- NPPA’s ceiling prices ensure essential medicines remain affordable, directly impacting public health outcomes.
- Reduction in drug prices can lead to increased accessibility for low-income patients, encouraging equitable healthcare.
- By regulating prices, NPPA helps control inflation in healthcare costs, making treatments more sustainable for families.
- Affordability of cancer drugs has been improved, resulting in better treatment adherence and patient survival rates.
- Overall, NPPA’s policies support the goal of universal health coverage by reducing financial barriers to accessing necessary medications.
2. Critically examine the role of the National List of Essential Medicines in ensuring drug affordability.
- NLEM identifies essential medicines that are crucial for public health, guiding NPPA’s pricing policies.
- Inclusion of anti-cancer drugs in NLEM ensures that vital treatments are prioritized for price regulation.
- Regular updates to NLEM reflect changing healthcare needs and emerging therapies, maintaining relevance in drug affordability.
- NLEM’s focus on essential medicines aids in resource allocation, ensuring that critical drugs are available at lower costs.
- The list serves as a benchmark for manufacturers, promoting the production of affordable generics and increasing competition.
3. Explain the significance of the Production Linked Incentive Scheme for the pharmaceutical industry in India.
- The PLI Scheme encourages domestic manufacturing of pharmaceuticals, reducing dependency on imports.
- With ₹15,000 crore allocated, it aims to boost production capacity, particularly for essential drugs like anti-cancer medications.
- By incentivizing local production, the scheme promotes job creation and technological advancement within the industry.
- Increased domestic manufacturing can lead to lower prices for consumers, enhancing affordability and access.
- The PLI Scheme aligns with the government’s vision of self-reliance in healthcare, contributing to national health security.
4. With suitable examples, discuss the impact of government initiatives on access to affordable cancer treatment in India.
- NPPA’s price capping on 131 anti-cancer formulations has resulted in price reductions, saving patients ₹294.34 crore annually.
- Tax reductions, such as nil customs duty and reduced GST, have lowered retail prices, making treatments more accessible.
- Under the AMRIT initiative, cancer medicines are sold at discounts up to 50%, directly benefiting patients financially.
- Ayushman Bharat provides ₹5 lakh health coverage, facilitating access to cancer treatments for low-income families.
- Financial assistance schemes like the Health Minister’s Cancer Patient Fund ensure that patients receive necessary care without financial strain.
