Decoding the Non-Patent Drug Cost Control Mechanism:

• The Department of Pharmaceuticals recently issued a notice detailing the new method for determining ceiling prices for off-patent drugs.
• The price calculation for the ceiling price will exclude the innovator brand and any of its licensee partner brands.

Why is it Significant?

• This development is particularly important given the recent expiration of patents for several key diabetes drugs.
• The Department of Pharmaceuticals has held meetings with industry representatives and stakeholders to discuss this matter.

Pricing Mechanism and the Creation of a Predictable Pricing Regime:

• As per industry experts, the maximum price of a combination drug, such as glimepiride and pioglitazone for diabetes, will be half the price of glimepiride.
• The price of pioglitazone in combination will be 20% less than the current highest price.
• The highest price will undergo a review after one year.
• This approach will make drug pricing more predictable for consumers and manufacturers alike.

The Advantages of a Pricing Mechanism for Off-Patent Drugs:

• Industry insiders believe this new pricing mechanism for off-patent drugs will be beneficial for all kinds of treatments, not just for diabetes medication.
• This will be a significant benefit for consumers.

National Pharmaceutical Pricing Authority (NPPA) and the Price Cap on Off-Patent Anti-Diabetes Drugs:

• The National Pharmaceutical Pricing Authority (NPPA) capped the prices of anti-diabetes drugs after Glimepiride's patent expired last year.
• In a subsequent move, the NPPA set the prices of these two drugs to range between Rs 10-20 per tablet in August.
• It is expected that Vildagliptin, a drug produced by Novartis, will lose its patent in the upcoming year.