Press Information Bureau

Government of India

Ministry of Chemicals and Fertilizers

30-November-2012 14:32 IST

Under the provisions of the Drugs (Prices Control) Order, 1995 (DPCO, 1995) the prices of 74 bulk drugs and the formulations containing any of these scheduled drugs are controlled. National Pharmaceutical Pricing Authority (NPPA) fixes or revises prices of scheduled drugs / formulations as per the provisions of the DPCO, 95. The NPPA monitors the prices of all formulations including imported scheduled formulations under price control. Under the provisions of DPCO, 1995, no person is authorized to sell any scheduled formulation (medicine) to a consumer at a price exceeding the price notified / approved by the NPPA.

The prices of formulations containing 74 bulk drugs specified in the First schedule of the DPCO, 1995 that presently are under price control regime are fixed / revised by NPPA on the basis of formula contained in Para 7 of the DPCO, 1995 which includes Material cost, Conversion cost, Packing Material cost, Packing Charges and a maximum allowable post manufacturing expenses of upto 100 per cent and the instant guidelines on the subject. Actual allowable taxes are also added to arrive at the equivalent MRP.

In respect of drugs not covered under the DPCO, 1995 i.e. non-scheduled drugs, manufacturers fix the prices by themselves without seeking the approval of Government / NPPA. The prices of non-scheduled formulations are not fixed by NPPA. There is no control on the launch price of the non-scheduled formulations. However, as a part of price-monitoring activity, NPPA regularly examines the movement in prices of non-scheduled formulations. The monthly reports of IMS Health and the information furnished by individual manufacturers are utilized for the purpose of monitoring prices of non-scheduled formulations. Wherever a price increase beyond 10% per annum is noticed, the manufacturer is asked to bring down the price voluntarily failing which, subject to prescribed conditions, action is initiated under paragraph 10(b) of the DPCO, 1995 for fixing the price of the formulation in public interest.

The Department of Pharmaceuticals had prepared a draft National Pharmaceutical Pricing Policy, 2011 (NPPP-2011) based on the criteria of essentiality as per the medicines as under National List of Essential Medicines-2011 (348 drugs with specified dosage and strengths), as stipulated by the Ministry of Health and Family Welfare which was placed before the Group of Ministers (GoM). Based on the recommendations of the GoM, National Pharmaceutical Pricing Policy 2012 (NPPP-2012) was formulated and placed before the Cabinet. The Cabinet considered NPPP-2012 in its meeting held on 22.11.2012 and approved the same with certain modifications. Further action to notify NPPP-2012 has been undertaken.

This information was given by the Minister of State for Chemicals and Fertilisers, Shri Srikant Kumar Jena in a written reply in the Rajya Sabha today.

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DNM/NSK/NV

Price control of scheduled medicines: NPPA fixes prices per formula; monitoring can trigger action for excessive non scheduled increases. Under the DPCO, 1995 the NPPA fixes or revises prices of formulations containing the 74 scheduled bulk drugs using the para 7 formula (Material, Conversion, Packing costs, allowable post manufacturing expenses and taxes) to determine MRP; scheduled formulations cannot be sold above NPPA notified prices. For non scheduled drugs manufacturers set prices but NPPA monitors price movements and may act under paragraph 10(b) where annual increases exceed 10 percent.