Central Information Commission asks Health Ministry and NPPA to check the menace of overpricing of essential drugs

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New Delhi: The Central Information Commission has recommended to the Union Ministry of Health and Family Welfare, Department of
Pharmaceuticals and National Pharmaceutical Pricing Authority (NPPA) to initiate a coordinated attempt to address the issue of checking the menace of overpricing of essential drugs and excessive trade margins to promote greater transparency for the benefit of the common man within a period of 2 months.

Central Information Commissioner Bimal Julka passed a significant order on 1 October 2018 in response to an appeal under the RTI Act linked with overpricing of essential drugs. The order says the information sought with regard to the subject matter pertained to Union Health Ministry which also had a catalytic role to play in checking the menace of over pricing of essential drugs and excessive trade margins.

The Commission has observed that the larger issue relating to the price structure and extraordinary heavy trade margins on the medicines especially generic medicines had not been addressed by the Respondent. The Respondent (NPPA) present at the hearing expressed inability to intervene.

The Appellant, S. P. Manchanda, through his RTI application had sought information on 5 points regarding whether or not NPPA was aware that some oncology medicines required for treating cancer had MRP printed which was many times more than their ex-factory price or import price with much higher profit margin. If yes, steps taken by the Authority to regulate their prices and action taken against manufacturers, importers, distributors and hospitals and doctors for looting the hapless patients, whether NPPA received complaints from the public or any other government organization or NGO on the aforementioned issue, details of the complainants who filed complaints during the last 5 years and the related issues.

The information sought by the appellant was in the larger public interest pertaining to the price regulation of oncology medicines
required for treating cancer patients. It was submitted before the Commission that a cogent and clear response ought to have been provided by the Respondent instead of skirting around the issues and taking the plea of disproportionate diversion of resources in answering the application. The intervener Subhash Chandra Agrawal raised larger public interest issues regarding availability of essential drugs at inflated MRPs detrimental to the interests of the needy patients who suffer the most. It was argued that the Ministry of Health, Department of Pharmaceuticals and NPPA have not been able to check the perpetual escalation in prices of essential drugs at exaggerated MRPs. While technically, in accordance with the provisions of the RTI Act, 2005, the information may have been provided to the Appellant but the greater issue of the mental agony and harassment caused to the suffering patients for abnormally high prices of drugs remained unchecked.

The Respondent stated during the hearing that the information held and available with the Public Authority had been provided. While referring to the Drugs (Prices Control) Order, 2013 alongwith the National Pharmaceutical Pricing Policy, 2012, the Respondent submitted that the prices were regulated based on 1) Essentiality of drugs; 2) Control of formulations prices only and 3) Market based Pricing and that the “Essentiality” criteria for drugs under the NPPP- 2012 was to be met by considering the list of medicines specified in the National List of Essential Medicines as revised from time to time and most recently declared by the Ministry of Health and Family Welfare, Government of India. The Respondent nonetheless continued to maintain that they were adhering to the Drugs (Prices Control) Order, 2013. It was further informed that the aspect of revision of ceiling price of the individual drugs or retail price of a pack was a decision to be taken in consultation with the Ministry of Health and that the efforts were underway to coordinate the same. It was specifically mentioned that a draft policy paper to determine the prices of a large number of essential drugs was under preparation in consultation with Ministry of Health and that the same would be notified in due course.

The Commission received a written submission from the Respondent on 25 September 2018, giving a point-wise response to the queries raised in the RTI application. For point no. 1, it was stated that pursuant to the announcement of the National Pharmaceutical Pricing Policy, 2012 (NPPP, 2012), the Govt. notified Drugs (Price Control) Order, 2013 on 15 May 2013. The medicines specified in the National List of Essential Medicines 2011 (NLEM) were included in the First Schedule of DPCO, 2013 and brought under price control. Further, the National List of Essential Medicines, 2015 was notified by the Ministry of Health and Family Welfare in December, 2015. It was thereafter notified as the First Schedule of DPCO, 2013 in March, 2016 by the Department of Pharmaceuticals. Accordingly, NPPA had fixed and notified ceiling prices of 851 scheduled formulations including 2 coronary stents and 81 cancer medicines under revised Schedule I (NLEM, 2015). It was further stated that the Government was effectively monitoring the prices of scheduled medicines notified by NLEM and appropriate action was taken against companies overcharging for the drugs. The details of the overcharging cases initiated by the NPPA were also available on its website. With regard to point no. 2, it was stated that compiling the information on the subject for the last 5 years from different sources and obtaining the third party consent would take substantial time and resources of their office which would be against the larger public interest. As regards point no. 3, it was stated that the information was never denied to the Appellant as he was informed about the website link to access NPPA recommendations on the issue. Explaining that being an attached office communication was not made directly with other ministers for policy related issues, it was stated that the physical copy of voluminous document was not provided along with the reply as RTI application was lodged online and applicant had never asked for the physical copy specifically. Regarding point no. 4, the status of Appellant’s online grievance of 18 March 2018 was provided. Considering the difficulties associated with the compilation of information, the information about all other public grievances received through PG portal could not be provided. Regarding point no. 5, it was stated that the inspection was not required since the records relating to pricing of formulations and overcharging cases were available on the website of NPPA. Further the records were not static in nature and being updated from time to time. While explaining that the information asked by the Appellant was provided within the stipulated time period, it was stated that the status of complaint disposal was a  continuous activity in a regulatory mechanism and the status of overcharged cases was disclosed to the public only when the case reached to conclusion such as issue of demand to company or the matter had been referred to the Collector for recovery.

The Commission even received an e-mail from Subhash Chandra Agrawal on 27 September 2018 stating that he was intimated about the matter on the eve of the hearing and submitted that since he was pre-occupied he wished to intervene in the matter of larger public interest through e-mail and if required through audio conference. Explaining that although the Appellant had raised important issue only with reference to cancer medicines but NPPA also ignored price structure and extra ordinary heavy trade margins on medicines especially generic medicines. Even though the matter was repeatedly taken up through various portals, yet NPPA ignored such suggestions. It was further submitted that his intervention application was also not irrelevant since cancer patients also consumed medicines other than the ones exclusively meant for them. Thus, it was submitted that his suggestions could be made part of CIC’s verdict for recommendations, under the provisions of the RTI Act, 2005 including Section 25 (5) with a compliance report from NPPA in a time bound manner on the recommendations.

The Commission also received another written submission from Subhash Chandra Agrawal on 28 September 2018 with a prayer to direct the Respondent to place the matter before the concerned Ministers and Secretaries of the two concerned ministries for their
personal attention apart from seeking the action taken reports and working sheets on the suggestions in a time bound period to achieve a noble public cause.


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