1. What is National Pharmaceutical Pricing Authority (NPPA)?
  2. Recommendations of Pranab Sen
    1. How to regulate drug pricing?
    2. What about Patented drugs?
    3. Give PSU a chance
    4. Funding
    5. Excise duty reduce
    6. Open Website for public

What is National Pharmaceutical Pricing Authority (NPPA)?

  • It is an attached office of the Department of Chemicals and Petrochemical.
  • Motto: Affordable medicine for all
  • It enforces the provisions of the Drugs (Prices Control) Order [which was, issued under the Essential Commodities Act (ECA).]
  • monitors the availability of drugs, identify shortages, if any, and to take remedial steps;
  • It advices Government  on drug policy

Pranab Sen Task Force on Drug Pricing

  • In 2003 Supreme court passed an order that all essential drugs should remain under price control.
  • Therefore, Government of India set up a Task Force under Dr. Pronab Sen on drug pricing.
  • It submitted its final report in 2005.
  • Then why the hell do we need to study it after 7 years? ans- It becomes an important [yearbook] topic for UPSC mains exam, due to the Glevac Patent Case, which has been in news recently.
  • Crux is: Novartis company was refused the patent of Glevac (anti-cancer) drug in India and the judge said he was concerned with the extreme price of that drug.

Recommendations of Pranab Sen

Here are the major (and easy to remember) recommendations.

Pranab Sen task force drug pricing

Pranab Sen

How to regulate drug price?

  • Pranab Sen says that No need to impose a uniform price,.
  • But government should indicate only a ceiling price
  • The ceiling price of essential drugs should based on readily monitorable market based benchmarks, and NOT on cost of production.
  • The drug regulator must maintain a data base of brands and their compositions, he should not permit pharma companies to change chemical composition of a given brand.
  • Price regulation should be on the basis of ‘Essentiality’ of the drug
  • Donot apply price regulation on upstream products, such as bulk drugs.
  • Government should enact Drugs and Therapeutics (Regulation) Act (DATA) for price control on drugs.
  • Set up National Authority of Drugs and Therapeutics (NADT).
  • Adopt the recommendations of the Mashelkar Committee 2003 i.e The Centre should financially support State Governments to bring their state drug control formations to a threshold level.

What about Patented drugs?

  • All patented drugs and formulations should compulsorily be brought under price negotiation prior to the grant of marketing approval. (case CANCER DRUG;GLIVEC PATENT CASE; NOVARTIS;)
  • Government should encourage Insurance companies to extend health insurance covering medicines.

Give PSU a chance

  • Government should recognize the role of Public sector undertaking (PSU) PSUs for producing drugs.
  • All Central Government Departments must be advised to first procure their drugs from the PSUs at prices approved by NPPA
  • There should be bulk purchases of drugs by Government agencies, cooperatives or consumer bodies through public-private partnership


  • Central Government has set up a National Illness Assistance Fund (NIAF). It provides financial assistance to BPL patient, upto Rs.1.50 lakhs.
  • Similarly State Governments should form State illness Funds (SIF)
  • Government should increase the funding of Pharmaceutical Research and Development Support Fund (PRDSF).

Excise duty reduce

  • Reduce the excise duty on all pharmaceutical products from 16% to 8%.

Open Website for public

  • To create public awareness about drug pricing.
  • Use other possible modes of enhancing public awareness like public literatures, booklets, newsletters/magazines etc

Mock MCQ: which of the following statements are correct?

  1. National Illness Assistance Fund (NIAF) provides monetary relief for occupational hazards faced by workers in coal and asbestos industry.
  2. National Pharmaceutical Pricing Authority (NPPA) falls under the domain of Health Ministry.
  3. Both A and B
  4. Neither A nor B

Mains question:

  1. Write a short note on the salient recommendation of Pranab Sen Task force on drug price control.
  2. Critiques argue that drug price control goes against the principles of free market economy, and therefore will hurt innovation in the long term. Do you agree? Justify your stand.