A lot of multinational companies including Novartis, Roche and AstraZeneca run PAP. In most of the programmes, which cover expensive cancer drugs or those for rare diseases, there are no intermediaries or trade as such. The hospital buys the drug directly from the manufacturer and bills it to the patient.
The government is planning to apply the TMR formula to drugs in order to bring down their prices.
The Department of Pharmaceuticals has been holding meetings with the stakeholders to discuss reforms in the pricing framework drugs and medical devices. Several meetings have taken place this month.
Presentations have been given so far by the OPPI, Indian Drug Manufacturers Association, Indian Pharmaceutical Alliance, All India Drugs Action Network and the Laghu Udhyog Bharti.
In their presentation before the department, the OPPI suggested keeping PAPs out of the ambit of the TMR.
“Innovative companies (Indian and MNCs) provide PAPs for patented, first-in class/breakthrough drugs, innovative targeted therapies like biologics and complex monoclonal antibodies. About 60% of PAPs provide oncology drugs, the rest are still for critical care medicines, rare diseases, cardiology,” it said, adding that PAP is provided where the cost of therapy is high and member companies are unable to provide a much lower “India-specific price over significant external reference pricing”.
The OPPI further said that in the absence of PAPs, companies would not be able to provide net prices at the current level, thereby significantly impacting access to treatment.
“PAPs help companies, government and patients to achieve the desired outcomes-prices that work for India,” it added.
The OPPI has also sought exemption for patented and orphan drugs from the government-set price controls, people in the know told ET.
It has asked the government to do away with the existing practice of 50% price cuts upon patent expiry, citing that the government’s price setting provisions will stymie innovation.
