NLEM 2020: Should patented drugs be included in it?

Innovation is the lifeline of any economy and it needs to be encouraged

The basic purpose of NLEM is to guide the safe and effective treatment of priority disease conditions of a population and to promote the rational use of medicines.

Therefore, in order to maintain relevance, the NLEM needs revisions regularly due to

• Changing disease burden profile: The disease burden in a population does not remain static and keeps on changing
• Antimicrobial resistance: Emergence of resistant pathogens necessitate the inclusion of newer antimicrobials for the treatment of such infectious conditions
• Development of newer and better medicines: The approval of newer and better medicines results in a change in treatment guidelines for various disease conditions

In India, the entire NLEM is becoming a part of schedule I to the DPCO 2013, (whether it is NLEM 2011 or NLEM 2015) hence become the scheduled formulations and therefore come under the price-controlled mechanism of NPPA.

The COVID-19 pandemic has exposed some structural challenges that our pharma industry faces across the value chain. A severe impact is being experienced on account of:

• An unprecedented increase in API prices (around 25-30 per cent) primarily on account of China dependence and excipients; sharp rupee depreciation against dollar has further made the imports costlier
• The increased cost of operation due to new requirements regarding safety norms for COVID 19
• Increase in ancillary and domestic transportation cost. Currently, approximately 17 per cent of the Indian pharma market is under price control, (Source: AIOCD AWACS Data) rest is regulated by the NPPA. So from the price control perspective, one can propose selective formulations from NLEM in the schedule I to the DPCO 2013 and not the entire NLEM to substitute current one.

Due to these challenges of COVID-19, and as per NPPP 2012, to provide sufficient opportunity for innovation and competition to support the growth of the industry, as well as meet the goals of employment and shared economic well-being for all, the schedule I and revised NLEM should be discussed with all the stakeholders by the Standing National Medicine Committee (SNMC) before implementation.

Patented drugs in NLEM 2020

The DoP had a vision of developing India as a drug discovery and pharma innovation hub by 2020. The basis of the vision was a white paper shared by McKinsey and Company with the DoP, containing a rapid assessment of India’s opportunity in global pharma R&D. This whitepaper outlined the potential aspiration for 2020, describing opportunity areas for developing excellence and outlining the key imperatives for the Indian government. Almost all the patented pharma products have come from the global Big Pharma. Their R&D spend as a percentage of sales is around 20 per cent of their sales turnover (Ref Fierce Pharma)

In fact, this is part of a larger question on R&D and pharma innovation in India hence should be looked at from a larger perspective. Innovation is the lifeline of any economy and it needs to be encouraged.

We need to balance access to medicines and innovation, encouraging and ushering new products for ailing patients and foster a climate of innovation for the future of India. A control on pricing can be achieved nevertheless by making payment outcome-oriented so that the public pays for the outcomes and not for the drug. This brings in accountability and Rx norms for prescribing and radically change procurement and point-of-care decisions. This is difficult to achieve but can be given an abbreviated approval for use at least in government and quasi-government setups as a start. Further, this would encourage research-oriented pharma companies to consider India as a market rather than overlooking it. One of the major concerns is that India woul