On June 28, the National Pharmaceutical Pricing Authority (NPPA) increased the per unit price of Furoped, a life-saving drug for children with heart ailments, by almost eight times. The price of a 30 ml bottle of the drug will go up from Rs 10 to Rs 78 after the drug regulator’s decision. The hike was precipitated by an emergency. According to NPPA’s estimates, the supplies of Furoped had come down by almost 40 per cent after the drug regulator had imposed a price ceiling on the paediatric drug in November last year, bringing down its price from Rs 100 to Rs 10. This price revision is welcome. But the Furoped case also holds important lessons for drug price regulation, which the NPPA would do well to heed.
In a country with a broken public healthcare system, the importance of making medicines accessible cannot be overstated. However, drug price control measures in India have not always achieved this objective. The ceiling on prices of 74 drugs in 1995, for example, forced many companies to opt out of production of active pharmaceutical ingredients (API) bulk drugs or formulations that give medicines their therapeutic effect. Today China supplies two-thirds of India’s API requirements — including critical antibiotics used to treat tuberculosis. The decision on Furoped, too, according to the NPPA’s own admission, did not account for “market realities”. As a report in this paper highlighted, the regulation led the sole manufacturer of the paediatric drug in the country to withdraw supplies, alleging that the new price did not cover production costs. While the veracity of this allegation must be investigated, it’s also important that the country’s drug pricing policy is alive to the risk of medicines being pulled away from the market, especially in a situation where the producer has a near monopoly.
