India sets up panel to view NPPA workings

India's Ministry of Chemicals and Fertilizers, which oversees thenational pharmaceutical industry, has established an expert committee to look into the functioning of the National Pharmaceutical Pricing Authority, Ministry sources have told the Marketletter's New Delhi correspondent, Ajoy Sen.

The government sources, who declined to be named, said that a three-member expert committee had been established to suggest measures to improve the functioning and methodology adopted by the NPPA in fixing the prices of drugs.

Currently, prices of 74 bulk drugs and their formulations are fixed and reviewed periodically by the NPPA under the controversial Drug Price Control Order 1995. In revising the prices, the NPPA says that it takes into account factors including costs of raw materials and packaging, but pharmaceutical companies claim that the price-fixing mechanism is often unrealistic and irrational, and that revised prices offer little margin to encourage R&D or attract fresh investment into India.