The Indian government just reduced the autonomy of the regulator that makes drugs affordable

• The government has curbed the powers of the National Pharmaceuticals Pricing Authority (NPPA) when it comes to setting and putting caps on drug prices.
  
• Instead, a committee under Niti Aayog will be tasked with recommending price controls and monitoring the prices of specific drugs and health products.
  
• With the committee taking over, it seems the government will have a freer hand when it comes to setting or lifting price controls.
  

In a move that is likely to be met with backlash, the Indian government has curbed the powers of the National Pharmaceuticals Pricing Authority (NPPA) when it comes to setting drug prices, according to media reports.

Instead, the government, acting through the Ministry of Chemicals and Fertilisers, has decided to establish a committee under Niti Aayog, its public policy think tank, that will be tasked with recommending price controls and monitoring the prices of specific drugs and health products to ensure their affordability.

The committee will comprise a number of government officials in the Niti Aayog and the finance and health ministries. The proposal to establish the committee was mooted in April last year by the Niti Aayog, which reportedly said that the NPPA should monitor prices instead of fixing them.

The NPPA was established as an autonomous regulator in 1997 to oversee prices of drugs and products on the National List of Essential Medicines (NLEM), which is prepared by the health ministry, and set price caps. For example, it was the body that instituted a cap on the price of heart stents and was responsible for revisions to the policy.

Up until now, the health ministry made recommendations to the NPPA on price controls. Drugs that are listed on the NLEM, the number of which currently amounts to 750, can only be sold at prices set by the NPPA. Those that aren’t on the list are allows a 10% hike in annual prices subject to the discretion of the regulator - a responsibility it is no longer expected to have.

With the committee taking over, it seems the government will have a freer hand when it comes to setting or lifting price controls. Hence, the move has raised the ire of activists with the All India Drug Action Network (AIDAN). If the committee is swayed by corporate interests, it will have negative implications on the affordability and accessibility of these drugs.

More importantly, the authority of the NPPA to enforce price controls could also be endangered. With its ability to set prices curtailed, the ability to enforce those controls could also be a casualty.

The move to curb the NPPA’s powers isn’t surprising. Under the current central administration, the autonomy of a number of institutions, most notably the Reserve Bank of India and the Central Bureau of Investigation, have been compromised. As the country heads into elections, one hopes the public will take notice after feeling the effect of some of these incursions.


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