The Drug Price Control Order (DPCO) 2013 was introduced by the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers, Government of India, with a primary goal: to ensure the availability of essential medicines at affordable prices across the country. This regulation came into force under Section 3 of the Essential Commodities Act, 1955, and is implemented by the National Pharmaceutical Pricing Authority (NPPA), which is responsible for monitoring and regulating the prices of critical drugs. This order has had a profound impact on the pricing of over 300 essential medicines, directly benefiting millions of citizens by improving their access to life-saving drugs.
Why Did the Drug Price Control Order (DPCO) 2013 Come into Effect?
The DPCO 2013 was implemented to address several critical issues in India's pharmaceutical sector, particularly concerning drug pricing. Below are the primary reasons for the introduction of the DPCO 2013:
Rising Prices of Essential Medicines: Several pharmaceutical companies had hiked prices of essential drugs, making them unaffordable for the average consumer. This was done to maximize profits, which adversely impacted people who rely on these drugs daily.
Inaccessible Healthcare: Due to these soaring prices, many citizens found it increasingly difficult to afford essential medications. This led to a growing gap in healthcare access between different socioeconomic classes.
Government Intervention: To curb this practice, the Government of India brought forward the DPCO 2013, which defines the pricing of essential medicines to ensure they remain affordable and accessible to the public. It acts as a tool to check arbitrary price hikes while ensuring that the pharmaceutical sector thrives without exploiting consumers.
What is an Essential Medicine?
Essential medicines are drugs that satisfy the priority healthcare needs of a population. The concept of essential medicines was first introduced by the World Health Organization (WHO) in 1977. According to WHO, a medicine is classified as essential based on three criteria:
- Public Health Relevance: The medicine addresses key health issues that affect a large segment of the population.
- Efficacy and Safety: There must be solid evidence proving the medicine’s effectiveness and its safety for public use.
- Cost-effectiveness: The price of the medicine should be reasonable, considering the health benefits it provides.
Features of Essential Medicines
The importance of essential medicines cannot be understated in a country like India, where millions rely on affordable healthcare solutions. Here are some of the key features of essential medicines as emphasized in the DPCO 2013:
Availability: These medicines should be available at all times, in adequate amounts, and in appropriate dosage forms. Ensuring a consistent supply is crucial for addressing healthcare needs.
Quality Assurance: The medicines must be of assured quality. This means they need to be produced under strict quality controls to ensure their efficacy and safety.
Affordability: Essential medicines should be affordable to individuals and communities, ensuring that financial barriers do not prevent people from accessing necessary healthcare.
Rational Use: The use of essential medicines must be rationalized to avoid wastage and ensure they are prescribed based on need and efficiency.
Key Provisions of Drug Price Control Order (DPCO) 2013
Price Control Mechanism: The DPCO 2013 brought over 300 essential drugs under price control. It established a formula for setting prices based on the manufacturing costs, making drugs more affordable without compromising pharmaceutical companies' ability to produce them.
National List of Essential Medicines (NLEM): The NLEM plays a central role in determining which drugs are subjected to price control. All drugs listed in the NLEM come under the purview of DPCO 2013, ensuring these essential drugs are priced affordably for the public.
National Pharmaceutical Pricing Authority (NPPA): This independent body is responsible for enforcing DPCO 2013. The NPPA monitors and controls the prices of scheduled drugs (those listed in the NLEM) and ensures that any violations, such as overpricing, are penalized.
Supervision and Accountability: Under the DPCO, pharmaceutical companies must submit detailed cost sheets of their products to ensure transparency in the pricing process. This helps in auditing and monitoring the prices of drugs to ensure compliance.
What Is the Significance of Drug Price Control Order (DPCO) 2013?
The DPCO 2013 is a landmark regulation for the Indian healthcare sector, ensuring that essential medicines remain accessible to the population. Below are some key points that highlight its significance:
Public Access to Affordable Medicines: The DPCO 2013 helps regulate the prices of essential drugs, ensuring that they remain within the financial reach of the general population. This helps bridge the gap in access to necessary healthcare between different income groups.
Encouraging Bulk Availability: With controlled prices, essential medicines are made available in bulk, reducing the reliance on expensive alternatives during emergencies. This also encourages the production of generic medicines, further driving down costs.
Reduced Financial Burden on Households: By controlling the prices of essential drugs, the DPCO 2013 helps reduce the overall healthcare expenses of Indian households, making healthcare more affordable.
Amendments Under Drug Price Control Order (DPCO) 2019
In 2019, the DPCO was amended to adapt to the evolving pharmaceutical landscape. Below are the key amendments introduced under the DPCO 2019:
Exemption for Innovative Patented Drugs: Drug manufacturers who introduce innovative patented drugs to the market were given a 5-year exemption from price control regulations. This was done to encourage pharmaceutical innovation and the development of new therapies.
Orphan Drugs Exemption: Drugs used to treat rare diseases, also known as orphan drugs, were exempted from price control. This move aimed to encourage the production of drugs for rare conditions, where treatment options are often limited and expensive.
Market-based Pricing: The DPCO 2019 amendments maintain the use of market-based data to set prices for drugs, ensuring that prices reflect real market conditions. The government, however, retains the right to validate the data through surveys or other means if necessary.
Impact of the Amendments on the Healthcare Sector
The DPCO 2019 amendments serve to strike a balance between encouraging pharmaceutical innovation and maintaining affordable drug prices for the general public. Here are some of the key impacts of these amendments:
Boost to Innovation: By exempting innovative patented drugs from price control, the amendments incentivize companies to invest in research and development, fostering innovation in the pharmaceutical sector.
Availability of Orphan Drugs: The exemption for orphan drugs encourages pharmaceutical companies to produce treatments for rare diseases, which were previously overlooked due to the small patient population and limited profitability.
Continuing Price Regulation: Despite the amendments, the central government retains the authority to regulate drug prices based on market conditions, ensuring that essential medicines remain affordable.
The Role of National Pharmaceutical Pricing Authority (NPPA)
The National Pharmaceutical Pricing Authority (NPPA) plays a critical role in implementing and enforcing the DPCO. This independent body, attached to the Department of Pharmaceuticals, monitors drug prices, ensures compliance, and penalizes companies for overpricing. The NPPA also works to ensure that pharmaceutical companies adhere to price controls while maintaining the availability of essential medicines in the market.
Conclusion
The Drug Price Control Order (DPCO) 2013 and its subsequent amendments in 2019 have had a profound impact on India's healthcare landscape. By regulating the prices of essential medicines, the DPCO ensures that life-saving drugs are affordable and accessible to all, regardless of their economic background. The amendments introduced in 2019 aim to encourage innovation in the pharmaceutical sector while maintaining the affordability of essential drugs. With the support of the National Pharmaceutical Pricing Authority (NPPA), the DPCO remains a cornerstone of India's efforts to provide equitable healthcare access to its population.
