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NPPA to start announcing revised prices of essential drugs as per new DPCO soon

 

With the new Drug Price Control Order is in force setting the norms for fixing the prices of essential medicines, the first batch of revised prices is likely to be announced within a couple of weeks time.

The National Pharmaceutical Pricing Authority (NPPA), the agency responsible for fixing the prices, is learnt to have already started the process of revising the prices as per the new norms and the first batch with new prices may be announced this month itself.

As per the new Pharmaceutical Pricing policy, already notified by the Government, the NPPA has to fix prices of 652 formulations, which will serve as the benchmark for companies. The prices will be fixed on market-based mechanism.

“The DPCO 2013 was ready for some time now and it has given time for NPPA to begin the process already so that the effect of the policy could be made felt in the market at the earliest. The manufacturers will be given 45 days to clear the old stocks and implement the new rates after fixation,” sources in the Department of Pharmaceuticals (DoP) said.

The NPPA has already been gathering market data regularly for monitoring from IMS Health and the same data will be the base for fixing the prices. As per the DPCO, the agency can validate such data through 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,” according to the Order.

The new policy has brought 348 essential drugs under price control, against 74 specified in the earlier DPCO. Prices of 652 formulations thus will be fixed and they fall under 27 therapeutic areas like anti-allergic (cetrizine), cardiac (aten), gastro-intestinal medicines (ocid), pain-killers (paracetamol) and anti-diabetic drugs (insulin) are expected to come down. Others in the list include anti-fungal, anti-tuberculosis, anti-leprosy, anti-hypertensives and cancer drugs.

The government on Thursday notified DPCO 2013 with effect from May 15, replacing the 1995 order. It was issued under the Essential Commodities Act, 1955, laying down the mechanism for regulating the prices.

While giving the formula of fixing the prices, the DPCO has fixed 16 per cent as the margin for retailers in the case of new drugs. “The maximum retail price of scheduled formulations shall be fixed by the manufacturers on the basis of ceiling price notified by the Government plus local taxes wherever applicable, as Maximum Retail Price = Ceiling Price + Local Taxes as applicable. The maximum retail price of a new drug shall be fixed by the manufacturers on the basis of retail price determined by the Government plus local taxes wherever applicable, as: Maximum Retail Price = Retail Price + Local Taxes as applicable,” the order said.

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