MUMBAI:Over the space of a month, the National Pharmaceutical Pricing Authority (NPPA) has transformed itself into a watchdog with teeth, and it’s putting the bite on Big Pharma.
First came the crackdown on stent pricing, targeting what it said was runaway pricing in the Rs 3,600-crore market. Prices were slashed by 80-85%, hitting multinationals such as AbbottBSE 1.01 % and Boston Scientific along with homegrown companies like Translumina Therapeutics.
Then came an even bigger crackdown — the regulator said 634 drugs were suspected to be priced higher than the ceiling fixed for them under the Drug Price Control Order (DPCO). That affected companies across the board — Sun PharmaBSE 1.44 %, CiplaBSE 0.08 %, LupinBSE 0.70 %, AstraZenecaBSE 0.48 %, GlaxoSmithkline and PfizerBSE -0.87 % among others.
The man leading the charge is NPPA Chairman Bhupindra Singh, 57, who took charge at the beginning of last year.
“My job is just to set up realistic targets, prepare a plan of action and Team NPPA does the rest,” Singh told ET. “They know that I am there to take responsibility and accountability for all missed goals.”
Opinions about Singh are sharply divided, as expected, between “overzealous and overstepping” and activists who say he makes for a refreshing change after being “used to supine bureaucracy”. Still, some government officials are uncomfortable, questioning the impact of such harsh audits on the investment climate.
Following a whistleblower’s email on February 27, Singh and his 10-member NPPA team are now looking into allegations of price collusion in various brands of anti-diabetic drug vildagliptin. The drug is made by companies such as NovartisBSE -0.21 %, Abbott, Emcure and USV Pharma. The companies involved in the NPPA actions have denied any wrongdoing.
The soft-spoken Singh, an Indian Administrative Services officer belonging to the Uttar Pradesh cadre, has been busy firing off notifications after he took over, even using social media to spread the word — he’s got 800 followers on Twitter. Also, significantly, hospitals are now coming under NPPA scrutiny.
“Hospitals need to redefine their role as a ‘healthcare provider’ or a ‘distributor/dealer of stents, other devices/drugs or both,” he said in a tweet late last month. This seemed to be aimed at hospitals complaining about the stent price cuts.
The NPPA sent show-cause notices after complaints about stent prices to hospitals such as Max in New Delhi, Lilavati in Mumbai and Metro in Hyderabad. “Total 24 complaints of overcharging on stents, nine hospitals issued show-cause notices, copy of bills awaited in other cases,” Singh tweeted on March 2. Last week, a hotline was set up for patients and whistleblowers wanting to phone in complaints about shortage of stents because of the recent order.
The NPPA’s crusade comes a few months after the Niti Aayog said the pricing regulator needed to be scrapped, a move that faced criticism. That proposal now seems to have gone on the backburner. More importantly, the once-disregarded regulator gained endorsements from Prime Minister Narendra Modi during the current election campaigns.
Singh said all the allegations against him can be refuted with facts, that the stent price cap was imposed after detailed deliberations with industry.
Indian drugmakers are concerned that the NPPA isn’t toeing the line of the department of pharmaceuticals (DoP), which the regulator comes under.
“The problems have cropped up because of imaginative and arbitrary implementation of the pricing policy and unbridled turf war between the government (DoP) and the regulator (NPPA),” wrote DG Shah of Indian Pharmaceutical Alliance lobby group to Niti Aayog Vice-Chairman Arvind Panagariya on February 28. “This has resulted in unwarranted price fixation, open defiance of the government’s corrective orders by the regulator, and frustrating litigations for the industry. It has reached a stage where the industry wonders if the country has arule of law.”
This sentiment was echoed by a lawyer who represents many large pharma clients, arguing that the regulator was imposing a one-size-fits-all approach.
“I don’t think the secretary, DoP, and NPPA chairman see eye to eye,” he said. “Stents were brought under the National List of Essential Medicines (NLEM). The NLEM committee recognised that there are different kinds of stents like drug eluting, BVS (bioabsorbable vascular stents) and wanted that they be categorised and priced differently. Under the Drug Price Control Order (DPCO), there is no room for nuance, so the regulator used para 19 and put everything under it. As a result, stents like BVS, landed price of which is about Rs 2 lakh, are not available. This is bizarre.”
Paragraph 19 of the DPCO allows tBhuindrahe NPPA to set the price of any drug “in extraordinary circumstances, if it considers necessary so to do in public interest”.
AdvaMed, a lobby group for global stent manufacturers, concurred. “The singular focus on controlling ceiling price of stents, without attempting to address the larger picture and correct inefficiencies in the healthcare ecosystem will not achieve its stated benefit, in the long run,
But Singh has strong support in the opposite camp.
“He has taken a very strong step. Very few people take such steps and this should happen more often,” said Birendra Sangwan, a lawyer who’s moved court to curb stent prices.