Price fixation of technically different products by NPPA
The article essentially speaks about technological advancement within a class – coronary stents and other medical devices – and the Government order compelling the technologically advanced devices selling at a loss. The Article also states that when invited to prove technological superiority the companies like Abott, Boston Scientific and Medtronic did not submit data.
This shows that companies do not want the benefit of price on Technological superiority alone but by lobbying and arm-twisting. Even when NLEM Committee on coronary stents invited the companies they could not prove superiority in clinical trials. I think India has a track record of not succumbing to pressure tectics. Companies can at best get their voice heard by applying such pressures.
DPCO 2013 is a quantum shift from cost based system being followed right since inception upto DPCO 1995 and therefore certain difficulties were quite evident. In its effort the Government had initially set up technical committee to look into genuine grievances of companies on technical differentiation within the same class and then amended DPCO and added para 11 in early 2016 to take care of technological gaps. If implemented more judiciously backed with technological data perhaps such difficulties could have been overcome. Otherwise the inclusion of para 11 by amending DPCO is not expected to provide the desired result.
Before fixing the prices all the available devices needed to be evaluated by subject experts with reference to the technological superiority or otherwise. Government could give data to the US Government and not succumb to the unreasonable arm-twisting. One has to compare or club apple with apple. Patients have the right to get superior technology. But the companies need to prove it. Nobody will sell the product at a loss for ever. In today's word of technology one has to assess the technological advantage before fixing the price.. If after that companies raise the issue of technical opinion of a specialist, Government should not hesitate as Government has nothing to lose after the prices are fixed. Under para 31 notified prices are to be followed when the Review application is pending. At least after the point is raised by the companies a conscious decision should be taken instead of rushing to dispose of the Review Petition.