Lower-priced drugs allowed increase
Economic Co-ordination Committee (ECC) of the Cabinet has reportedly allowed an increase in the threshold of lower-priced drugs by 50 per cent of Consumer Price Index (CPI) every year. The ECC took this decision after a detailed discussion on Drug Pricing Policy prepared by the Ministry of National Health Services, Regulation and Co-ordination. The committee headed by Finance Minister, Senator Ishaq Dar also decided that hardship cases will be considered once in every three years.
Copyright Business Recorder, 2015
Official documents exclusively made available with Business Recorder reveal that the ECC was informed that the maximum retail prices of drugs will remain frozen at the approved level of maximum retail as on October 31, 2013 till June 30, 2016 except for maximum retail prices under the hardship category as approved by the federal government. The prices of originator brands of New Chemical Entities (NCEs) will be reduced after four years or at the time of entry or at least three generic/bio-similar brands in the market, whichever was later @ 10 percent per annum for consecutive three years.
In original policy a reduction of 30 percent was in a single stage after five years or at the time of entry of 03 generics/ bio-similar, whichever was earlier.
According to documents, maximum retail price of any generic of originator brand of NCE will be at least 15 per cent less than maximum retail price of originator brand so reduced. Generics marketed at prices less than 85 percent of the reduced originator brand price will not increase their prices except any increase as expressly allowed under this policy. Maximum retail prices of originator brands of drugs listed in schedule will be reduced by 10 per cent per annum for three consecutive years of the maximum retail prices as fixed by the federal government except for originator brands whose prices were not higher than average prices of the same brands in India and Bangladesh. In original policy reduction @ 30 per cent was in single stage and prices were not referenced to India and Bangladesh.
The committee was further informed that in order to verify the prices of drugs in the reference countries, Information Medical Statistics (IMS) health, a global organisation which maintains data of prices of drugs has also been added as verifying organisation in addition to Pakistan High Commission/Embassy and four big global firms of Chartered Accountants.
Definition of lower price drugs/threshold limit has been made reasonable to encourage their production: (i) Rs 3 per tablet/caplet/capsule/respule; (ii) Rs 3/- 5 ml of syrup/suspension/ elixir; (iii) Rs 3 per patch; (iv) Rs 6 per sachet; (v) Rs 15 per injection; (vi) Rs 3 per 1 gram of cream/ointment/ gel (non sterile) subject to maximum pack size of 20 gram; (vii) Rs 4 per 1 gram of cream/ointment/gel(sterile) subject to maximum pack size of 20 gram and ;(viii) Rs 4 per ml of eye/ear/nasal drops/nasal spray ( sterile) subject to maximum pack size of 10 ml.
The committee was briefed that annual increase of lower-priced drugs will be allowed or maximum equal to CPI once in any financial year from July 1, 2016 till maximum retail price/cap of threshold as prescribed in the policy was achieved. In the original policy, it was restricted to 70 per cent of CPI (with cap of 6 per cent).
This has been proposed to encourage production of lower price drugs. Policy board will constitute a committee to decide the hardship cases and fix a maximum limit for increase in prices of intravenous infusions. Hardship cases of schedule molecules will be processed on priority and decided on the basis of 'first come first serve' basis but not later than nine months from the date of notification of this policy. Maximum increase on hardship case (except for orphan drugs, lower-priced drugs & intravenous infusions) will be 8 per cent per annum of the existing approved price of the respective drug. In case of lower-priced drugs, increase will not be exceeding 25 paisa per tablet/caplet/capsule/ respule/patch/5ml of syrup, suspension and elixir.
The committee was further briefed that after disposal of the existing pending hardship cases, new hardship cases will be decided within 90 days of submission of the hardship cases - complete in all respect - with the Division of Costing and Pricing, DRAP.In case no response was sent to the applicant of hardship cases within 90 days, the applicant may increase its price to a maximum of 8 per cent on the existing approved price and inform the Division or Costing and Pricing, DRAP with evidence that a complete case was submitted with the Division of Costing and Pricing, DRAP 90 days prior to the increase.
The document further disclosed that no applicant will exercise this option more than once in any financial year. Price reduction and notification of increase under hardship cases for the first time will take place simultaneously within 9 months of notification of this policy except for orphan drugs as identified by the committee on orphan drugs constituted by the Policy Board.