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

New Delhi: Through a recent Gazette notice the Central Government has 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 has also exempted orphan drugs.

The amendments come in the form of addition and substitutions to the Paragraph 32 of the said order that talks about non application of DPCO in certain cases

sub-paragraph(i) of the said said section focuses on the non-application of the provision to "a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970) (product patent) and not produced elsewhere, if developed through indigenous Research and Development, for a period of five years from the date of commencement of its commercial production in the country."

In Drugs Price Control Amendment Order,2019 effective from 03 January 2019 paragraph 32, sub-paragraph(i) has been substituted namely,

"a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970), for a period of five years from the date of commencement of its commercial marketing by the manufacturer in the country."

With this latest amendment, drugs manufactured and marketed abroad will also be exempted from price control for five years. The exemption of innovative drugs would commence from the date of its commercial marketing by the producer in the country. Earlier as per DPCO 2013, drugs produced within the country was exempted from price control for five years.

In addition to this, the amendment has also inserted in the following sub-paragraph after sub-paragraph (iii), 32, DPCO 2013, in the list of non applications of DPCO namely,

" Drugs for treating orphan diseases as decided by the Ministry of Health and Family Welfare, Government of India."

Orphan drugs are highly expensive drugs produced to treat rare diseases.

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