DoP Gazette on Price Cap Exemptions contrary to Health Ministry Expectations

New Delhi: The recent order passed by the Department of Pharmaceuticals (DoP) to exempt novel foreig-made drugs as well as orphan drugs from price capping for the first five years, is starting to face heat from experts given the fact that it will raise the price of treatment of rare diseases.

The move has also drawn more opposition in the light of media reports pointing out that health ministry had asked to DoP to Impose a Price Cap on such drugs rather than giving them an open exemption.

Medical Dialogues had earlier reported that through a recent Gazette notice the Central Government made amendments to the Drugs Prices Control Orders (DPCO),2013 which aim to exempt novel/innovative drugs developed and manufactured overseas from price control. The exemption of these drugs would commence from the date of its commercial marketing by the manufacturer in the country and would continue for a period of first 5 years. Besides innovative drugs, DPCO also exempted orphan drugs.

Also Read: Relief to Foreign Drugmakers: No price cap on innovative drugs for first five years

However, the notification seems to be counterproductive, as removing cap from orphan drugs would mean substantially increasing the price to treat rare diseases.

Orphan drugs are highly expensive drugs produced to treat rare diseases and based on the need of such life-saving drugs the ministry had been asking the Department of Pharmceuticals which comes under the Ministry of Chemicals and Fertilizers to bring them under price control.

On 29 November, health secretary Preeti Sudan had written to DoP secretary Jai Priye Prakash raising concerns over the “exorbitant cost” of life-saving drugs for rare diseases. “May I request (you) to kindly explore the feasibility of capping the prices of drugs used for the treatment of rare diseases so that their prices become responsible and affordable to the patients.”

Daily Mint quotes the letter as stating, “Support for such patients from the government is a subject matter of litigation in many cases. As you may be aware ministry has been receiving many representations regarding the exorbitant cost of life-saving drugs for rare diseases. The cost of treatment is unaffordable even for patients who are not poor.”

Sudan also wrote to the department of industrial policy and promotion (DIPP) asking it to analyze the feasibility of bringing such drugs under “compulsory licensing."

However, contrary to what the Health Ministry was demanding, DoP exempted these drugs from price control

“The DOP’s decision was consciously done in contradiction with its own previous stand. While the government is actively deliberating measures such as price caps and compulsory licensing to make orphan drugs more affordable, the DOP’s actions seek to topple the efforts of the ministry and committee set up to review the rare drug policy. The ministry’s appeal to the DoP for price capping and to DIPP for compulsory licences was submitted in its affidavit to the Delhi high court,” Malini Aisola, co-convenor, All India Drugs Action Network told the Mint adding that DOP’s action “appear to be mala fide”.