DRUGS PRICES CONTROL

• All medicines specified in the National List of Essential Medicine 2011 (NLEM) have been included in the first schedule of DPCO, 2013 (the Drugs (Prices Control) Order, 2013) and brought under price control.
• There are 614 formulations specified in the first schedule of DPCO, 2013 covering 27 therapeutic groups including medicines used in the treatment of Cancer, Tuberculosis, Diabetes, Cardiac disease, vaccines etc.
• Significant reduction in prices have been effected on the medicines notified under DPCO, 2013 as compared to the highest price prevailed prior to the announcement of DPCO, 2013.
•  The National Pharmaceutical Pricing Authority (NPPA) has notified the ceiling prices in respect of 404 medicines till last month under the Drugs Prices Control Order (DPCO), 2013.
• Prices of 112 drugs have reduced over 40% after the enforcement of DPCO, 2013.

          Administrative Control of NPPA 

• The Department of Pharmaceuticals in the Ministry of Chemicals & Fertilizers has notified the Drugs (Prices Control) Order, 2013 {DPCO, 2013} on 15th May, 2013 in supersession of DPCO, 1995.
• There is a change in the methodology of pricing of drugs, moving from ‘cost based pricing’ to ‘market based pricing’.
• There are 348 medicines (652 formulations) with specified dosage and strength in the National list of Essential Medicines, 2011 (NLEM) which have been included in the first schedule of DPCO, 2013 and brought under price control.
• Out of total NLEM drugs, National Pharmaceutical Pricing Authority (NPPA) has already notified the ceiling process in respect of 404 formulations up to January, 2014 under the provision of the said order.
• In respect of drugs not covered under the Drugs (Prices Control) Order, 2013 i.e. non-scheduled drugs, manufactures fix the prices themselves without seeking the approval of Government.
• However, DPCO, 2013 provides for monitoring the maximum retail price (MRP) of these non-scheduled formulations that no manufacturer can increase the MRP of a non-scheduled medicine more than 10% of MRP during preceding 12 months.
•  The Government has not studied the cost of scheduled medicines under DPCO, 2013.
• The government is not planning to shift the National Pharmaceutical Pricing Authority (NPPA) to the Union Health Ministry.

National Pharmaceutical Pricing Authority (NPPA)

• NPPA is an organization of the Government of India which was established, inter alia, to fix/ revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995.
• The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.
• It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

Functions of National Pharmaceutical Pricing Authority

• To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
• to deal with all legal matters arising out of the decisions of the Authority;
• to monitor the availability of drugs, identify shortages, if any, and to take remedial steps;
• to collect/ maintain data on production, exports and imports, market share of individual companies, profitability of companies etc, for bulk drugs and formulations;
• to undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals;
• to recruit/ appoint the officers and other staff members of the Authority, as per rules and procedures laid down by the Government;
• to render advice to the Central Government on changes/ revisions in the drug policy;
• to render assistance to the Central Government in the parliamentary matters relating to the drug pricing.