The Drug Prices Control Order (DPCO), 2013, which as estimated by the National Pharmaceutical Pricing Authority (NPPA), has helped patients save over Rs. 15,000cr since its enactment has been amended by the Drugs (Prices Control) Amendment Order, 2019, by the Ministry of Chemicals and Fertilisers in favor of drugmakers, manufacturing new drugs, and drugs treating orphan/rare diseases.

Wherein, the Centre will fix and aim to lower prices as per the DPCO in accordance to the market-based data available on drugs, the Amending order notified on the 3^rd of January 2019, also clarifies that the source of such market-based information shall be the data which is available with pharmaceutical market data specializing companies and in case the Centre needs to validate the data being generated, it may do so by conducting evaluations or surveys.

The Amendment, on NITI Aayog’s recommendations, has also drawn out certain exceptions to the DPCO, wherein, drug makers who have invented and registered a patent for new drugs shall be exempted from price control for the first 5 years from the date of their marketing. It also seeks to exempt drugs that treat orphans, i.e. rare diseases. These exemptions are mainly brought in, to allow monetary incentives for manufacturers in the first 5 years of marketing the generic drugs before they start getting licensed to maintain lower costs. Drugs manufactured for rare diseases have always been capital intensive. The manufacturing demands monetary infusion due to its character which is low on demand. Thus, controlling the selling price to lower the same will in turn, have an effect on manufacturing.

The Amendment Order has come to the forefront once again as a high-level government panel has brought in a myriad of recommendations through a report, the copy of which is with PTI. The recommendations range from granting ‘compulsory licensing’ to enable Pharma companies to manufacture generic drugs without the permission of the patent-holding companies. The recommendations have faced a lot of backlash from multinational pharmaceutical companies. The amendment order does put the price cap recommendation to ease for at least the first 5 years and for drugs treating rare diseases. However, the ‘compulsory licensing’ bull still runs loose for the Pharmaceutical Companies.

Author: Ms. Niharika Sanadhya, Legal Intern at Global Patent Filing. In case of any queries please contact/write back to us at support@globalpatentfiling.com.