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What is National Pharmaceutical Pricing Authority?
In order to bring down drug prices, a high level panel on Wednesday recommended capping the trade margins at 35 percent on all the drugs with MRP of above Rs 50.
In order to bring down drug prices, a high level panel on Wednesday recommended capping the trade margins at 35 percent on all the drugs with MRP of above Rs 50. The drug price regulator National Pharmaceutical Pricing Authority (NPPA) fixes prices of medicines based on average cost of all drugs in that particular segment which have market share of more than 1 percent.
The panel has also recommended an addition in the DPCO 2013, so that no manufacturer can sell the drug to the trader, if its MRP exceeds the margins notified by the government from time to time. The NPPA was established through a Government of India Resolution on August 29, 1997. It is responsible for the implementation of the National Pharmaceutical Pricing Policy, 2012 and the Drugs (Prices Control) Order (DPCO), 2013.
Drug price control, which is prevalent in one form or the other throughout the world, assumes special importance, as it directly impacts the quality of public health. The primary aim of the NPPA is to ensure adequate availability of essential and lifesaving drugs at affordable prices and in doing so, it carefully balances the interests of both the producers and the consumers.
The DPCO 2013, provides for a market based pricing mechanism as opposed to cost based pricing mechanism that was prevalent under DPCO 1995. The National list of Essential Medicines (NLEM) 2011 has been adopted as the first schedule of DPCO 2013. This includes 348 medicines under 27 therapeutic groups.
NPPA is mandated with the responsibility of fixing ceiling price of these medicines. As on date, 628 scheduled formulations are under direct price control, which covers around 12.51% of the domestic market (Annual Turnover Jan- Dec 2015), which is estimated at around Rs. 96,000 crore as per Pharmatrac database.
Government of India has notified the National list of Essential Medicines (2015) on 23rd December 2015. NPPA will be initiating the exercise of fixing the ceiling prices of the medicines in the NLEM-2015, after a decision on amendment of the First Schedule of the DPCO 2013 is taken by the Department of Pharmaceuticals.
The NLEM 2015 contains a total of 376 medicines, covering 799 formulations under 30 therapeutic groups. The Pharma Jan Samadhan (PJS), a public grievance portal was launched last year, to facilitate the submission of grievances by the public.
