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On January 03, 2019 the Central Government in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 (10 of 1955), vide order S.O.39(E) ("Amendment 2019") has amended Para 32 of ...
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On January 03, 2019 the Central Government in exercise of the
powers conferred by section 3 of the Essential Commodities Act,
1955 (10 of 1955), vide order S.O.39(E)
("Amendment 2019") has amended
Para 32 of Drugs (Prices Control) Order, 2013
("DPCO 2013") which enlists the
cases for which the provisions of the DPCO 2013 are not applicable.
In addition, the provision of reference data and source data for
fixing or revising the ceiling price of scheduled formulations
under Para 9 of DPCO 2013 have also been amended by
Amendment 20191.
The below table depicts standing of Para 32 and Para 9 of the
DPCO 2013 after introduction of Amendment 2019:
DPCO
2013 provisions prior to Amendment 2019
DPCO 2013
provisions after Amendment 2019
Paragraph-32: Non–application of the provisions
of this order in certain cases. –The
provisions of this order shall not apply to, -
a manufacturer producing a new drug patented under the
Indian Patent Act, 1970 (39 of 1970) (product patent) and not
produced elsewhere, if developed through indigenous Research and
Development for a period of five years from the date of
commencement of its commercial production by the manufacturer in
the country.
a manufacturer producing a new drug in the country by a new
process developed through indigenous Research and Development and
patented under the Indian Patent Act, 1970 (39 of 1970) (process
patent) for a period of five years from the date of the
commencement of its commercial production in the country.
a manufacturer producing a new drug involving a new
delivery system developed through indigenous Research and
Development for a period of five years from the date of its market
approval in India...
Paragraph-32: Non–application of the provisions
of this order in certain cases. –The
provisions of this order shall not apply to, -
a manufacturer producing a new drug patented under the
Indian Patent Act, 1970 (39 of 1970)(product
patent) and not produced elsewhere, if developed through indigenous
Research and Developmentfor a period of five years
from the date of commencement of its commercialproductionmarketingby
the manufacturer in the country.
a manufacturer producing a new drug in the country by a new
process developed through indigenous Research and Development and
patented under the Indian Patent Act, 1970 (39 of 1970) (process
patent) for a period of five years from the date of the
commencement of its commercial production in the country.
a manufacturer producing a new drug involving a new
delivery system developed through indigenous Research and
Development for a period of five years from the date of its market
approval in India.
Drugs for treating orphan diseases as decided by the
Ministry of Health and Family Welfare, Government of
India.]
[Paragraph-9: Reference data and source of
market based data;
The source of market based data shall be the data available
with the pharmaceutical market data specializing company IMS Health
(IMS), and if the Government deems it necessary, it may validate
such data by appropriate survey or evaluation.
The Government may in the due course of time come out with
other appropriate mechanism of collecting or obtaining the market
based data related to drugs and the decision of Government with
respect to collection or obtaining of data shall be
final.
The market based data, for fixing the ceiling price of
scheduled formulations for the first time after the notification of
this order, shall be the data of May, 2012.
The market based data for fixing the retail price of new
drugs available in the market, shall be the data available for the
month ending immediately before six months of receipt of
application for fixing the price of the new drug.
The market based data for fixing the ceiling price of a
scheduled formulation due to a revision in the first schedule shall
be the data available for the month ending immediately before six
month of notification of revision in the first schedule.
Notwithstanding anything contained in this order, the
reference date for the formulations which are part of the Drugs
(Prices Control) Order, 1995 shall be as per the provisions of
paragraph 10 of this Order.
[Paragraph-9: Reference data and source of
market based data;
The source of market based data shall be the data available
with the pharmaceutical market data specializing companyIMS Health (IMS), as
decided by the Governmentand if the Government deems
it necessary, it may validate such data by appropriate survey or
evaluation.
The Government may in the due course of time come out with
other appropriate mechanism of collecting or obtaining the market
based data related to drugs and the decision of Government with
respect to collection or obtaining of data shall be
final.
The market based data, for fixing the ceiling price of
scheduled formulations for the first time after the notification of
this order, shall be the data of May, 2012.
The market based data for fixing the retail price of new
drugs available in the market, shall be the data available for the
month ending immediately before six months of receipt of
application for fixing the price of the new drug.
The market based data for fixing the ceiling price of a
scheduled formulation due to a revision in the first schedule shall
be the data available for the month ending immediately before six
month of notification of revision in the first schedule.
Notwithstanding anything contained in this order, the
reference date for the formulations which are part of the Drugs
(Prices Control) Order, 1995 shall be as per the provisions of
paragraph 10 of this Order.
Notwithstanding anything contained in this paragraph,
for fixing or revising the ceiling price for formulations, the
Government may, if it is necessary so to do, consider market based
data available for any month, as deemed fit.]
Implication of Para 32 of DPCO after Amendment 2019:
Prior to the Amendment 2019, only those new drugs were outside
the price control which were patented in India (product patent) but
were not produced elsewhere and were developed through indigenous
research & development. After Amendment 2019, irrespective of
the fact that a new drug is developed and produced by a
manufacturer outside India, all new drugs (which are patented under
the Indian Patent Act, 1970) are outside the price control under
the DPCO for five years from their commercial marketing in India.
The Amendment 2019 would surely benefit new drugs manufacturers who
were unable to reap the advantages of price control exemption
provided under the DPCO only due to the fact that they developed
and produced new drugs outside India.
In addition, drugs for treating orphan diseases (as decided by
the Ministry of Health and Family Welfare, Government of India) are
also kept outside the price control by Amendment 2019. This would
encourage multinational pharmaceutical companies to introduce their
drugs in India for treating orphan diseases without price
control.
Implication of Para 9 after Amendment 2019:
The amendment broadens the scope of selecting source
data/reference data for fixing or revising the ceiling price of
formulations and the same is not only limited to IMS health data.
However, it is to be seen in the coming times which are the
pharmaceutical market data specializing companies whose data will
be decided by the Government for ascertaining market based
data.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
New Drugs Patented Under The Indian Patent Act, 1970 Are Outside The Price Control For The First 5 Years From Their Commercial Marketing
IndiaIntellectual Property
Contributor
S&A Law Offices is a full-service law firm comprising experienced, well-recognized and accomplished professionals. S&A Law Offices aims to provide its clients (both domestic and international) with top-quality counsel and legal insights, which combines the Firm's innovative approach with comprehensive expertise across industries and a broad spectrum of modalities. Being a full-service law firm, we take pride in having the capability of providing impeccable legal solutions across various practice areas and industries and makes an endeavor to provide a 360 degree legal solution.
With registered office at Gurugram and other strategically located offices in New Delhi, Mumbai, and Bengaluru, along with associate offices across India, S&A is fully equipped to provide legal services on a pan-India basis.
