In a recent development, the Supreme Court has requested the government to elucidate the base and rationale for the pricing of Covid-19 Vaccines in its affidavit. The backdrop of this request is the varying price quotes by different vaccine manufacturers. The Drugs Control Act and Patents Act powers can be invoked at these circumstances.
Regulation of Drug Pricing in India
The Essential Commodities Act, established in 1955, is the central regulation for the pricing of essential drugs in India. This act’s section 3 led to the formation of the Drugs (Prices Control) Order (DPCO). More than 800 drugs are listed as “essential” in DPCO’s schedule, and their prices have been capped.
The regulation of the price cap is executed by the National Pharmaceutical Pricing Authority (NPPA), which was formed in 1997. They use a formula devised for each case to regulate the prices. However, patented drugs or fixed-dose combination (FDC) drugs aren’t covered under the DPCO. Hence, the price of the antiviral drug remdesivir, which is currently in high demand for Covid-19 treatment, is not regulated by the government. To include Covid-19 vaccines or drugs like remdesivir under DPCO, an amendment is necessary.
Legal Paths Available for Addressing Vaccine Price Disparity
Under the Patents Act, 1970 mentioned by the Supreme Court, there are two key provisions that could be potentially instigated to regulate the pricing of the vaccine. Section 100 of this Act bestows the central government with the power to authorize any pharmaceutical company to utilize inventions for the government’s purpose. This provision aids the government to license patents of the vaccines to specified companies, accelerating manufacturing and ensuring just pricing.
Also, Section 92 of this Act, relating to compulsory licensing, allows the government to license patents under particular circumstances as stated in the Act without needing the patent holder’s permission.
The Epidemic Diseases Act, 1897 Relevance
The Epidemic Diseases Act constituted in 1897 has been a primary legal instrument for the government in tackling the pandemic. Section 2 of this law gives the government the power to enforce special measures and outline regulations concerning dangerous epidemic diseases. The expansive, undefined powers presented by the Act can be employed to introduce steps for pricing regulation.
Looking at the Future
Besides these legislative avenues, experts have suggested that direct procurement from manufacturers by the central government could be the most advantageous path to ensure equal pricing. As the sole purchaser, the government will possess more bargaining power.
