NLEM is a list of medicines, prepared by the Ministry of Health and Family Welfare, which are essential in India, the DPCO is an order issued by the government under the essential commodities act which enables it to fix the prices of essential bulk drugs and their formulations.
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NPPA Ceiling Price Report
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5. National Pharmaceutical Pricing Authority
3rd
Floor, YMCA Cultural Centre
1 Jai Singh Road, New Delhi 110001
Injeti Srinivas, IAS
Chairman
27 February 2015
PREFACE
The National Pharmaceutical Pricing Authority (NPPA) is mandated with the task
of implementing the Drugs (Prices Control) Order (DPCO) 2013, which aims at making
available all essential and lifesaving medicines to all at affordable prices through the
instrumentality of price control. Drug price control is not something peculiar to India, but
one that is prevalent in most countries, including many developed countries, though the
methodology of price control may differ from one country to another.
2. Unlike the DPCO 1995, which adopted a cost-based approach for price fixation in
respect of scheduled drugs, the DPCO 2013 adopts a market-based approach for price
fixation. Second, the National List of Essential Medicines (NLEM) 2011 is adopted as the
primary basis for determining essentiality, and is accordingly incorporated in the First
Schedule to the DPCO 2013, which constitutes the list of scheduled medicines for the purpose
of price control. Third, the price control is applied to specific formulations with reference to
the medicine (active pharmaceutical ingredient), route of administration/ dosage form and
strength as contained in the First Schedule.
3. Under the market-based approach, the ceiling price of a scheduled drug is determined
by first working out the simple average of price to retailer (PTR) in respect of all branded-
generic and generic versions of that particular drug formulation having a market share of 1
percent and above, and then adding a notional retailer margin of 16 percent to it. The
maximum retail price (MRP) for that particular drug formulation must not exceed the
notified ceiling price plus applicable local taxes.
6. National Pharmaceutical Pricing Authority
3rd
Floor, YMCA Cultural Centre
1 Jai Singh Road, New Delhi 110001
4. All the existing manufacturers (including importers and marketers) of a scheduled
formulation, selling branded or generic or both versions of that formulation at a price higher
than the ceiling price plus local applicable taxes are required to reduce it to at least that
level. At the same time, all existing manufacturers (including importers and marketers) of
that formulation who are selling it below that price are required to maintain their existing
MRP. Implementation of the price notification is to be communicated, in Form-V of Schedule
II to the DPCO 2013, to all dealers, State Drug Controllers and NPPA immediately. Also the
current price list of scheduled drugs has to be displayed by every dealer and retailer.
5. The ceiling price fixed for each scheduled formulation becomes operative and legally
enforceable from the date on which the price is notified in the Gazette of India Extraordinary.
In other words, the medicine cannot be sold at an MRP exceeding the ceiling price plus
applicable local taxes from the date of price notification. However, for stock manufactured
or available in the market prior to publication of the ceiling price, a grace period of 45 days
is available to facilitate recall and/ or reprinting of the revised MRP on the label of the
medicine in accordance with the notified ceiling price. But under no circumstances does it
allow sale of a medicine at the pre-revised price even during the 45-day grace period, as the
same stock keeping unit (SKU) of a particular medicine should not be offered to the consumer
at a price exceeding the price specified in the current price list or the price indicated on the
label of the medicine pack, whichever is less. Similarly, all batches manufactured after the
price notification must necessarily conform to the notified ceiling price.
6. The notified ceiling price with respect to each scheduled formulation is valid for a
period of five years from the date of original price notification, but subject to annual revision
to be notified by NPPA which would be effective from the first day of April every year as
per the annual wholesale price index (WPI) notified by the Department of Industrial Policy
& Promotion with respect to the previous calendar year. The revision may mean increase or
decrease in ceiling price depending upon whether the WPI is positive or negative. The
manufacturers (including importers and marketers) are free to avail themselves of the annual
revision in case of increase, without obtaining prior approval of the Government, but they
are required to exercise their decision in this regard within 15 days of such revision and
report to the NPPA in Form-II of Schedule II to DPCO 2013 failing which it shall be construed
that the company has opted for non-revision of MRP and the concerned manufacturer shall
7. National Pharmaceutical Pricing Authority
3rd
Floor, YMCA Cultural Centre
1 Jai Singh Road, New Delhi 110001
be liable to deposit the amount charged over and above the pre-revised MRP, along with
interest from the date of overcharging. Further, they shall be bound to decrease their MRP
correspondingly in case of decrease in the ceiling price due to negative WPI.
7. Non-compliance with the notified ceiling price or, in other words, the MRP breaching
ceiling price plus applicable local taxes would be tantamount to overcharging the consumer,
which is liable to be recovered along with interest thereon from the date of overcharging.
The excess collection on account of overcharging along with interest is recoverable as arrears
to land revenue under the Public Demand Recovery Act.
8. Further, non-compliance of price notification issued by NPPA, depending upon the
gravity of the offence, could also attract prosecution under the Essential Commodities Act
(ECA), 1955. Section 7 of the ECA 1955 provides for imprisonment for a term which shall
not be less than 3 months, but which may extend to seven years and shall also be liable for
fine. Section 9 of the ECA, 1955 makes false statements/ information also punishable with
imprisonment for a term which may extend to five years or with fine or with both. Under
section 10 of the ECA, 1955, offences committed by companies are punishable, and shall
apply to every person who, at the time the contravention was committed, was in charge of,
and was responsible to, the company for conduct of the business of the company as well as
the company, shall be deemed to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly. Every offence committed under the Essential
Commodities Act, 1955 is a cognizable offence.
9. Implementation of the DPCO 2013 is the joint responsibility both NPPA and State
Drug Controllers. Accordingly, most State Governments/ Union Territories have duly
empowered the State Drug Controller and Drug Inspectors under paragraph 30 (1) of DPCO
2013, which allows any Gazetted Officer of the Central Government or of a State
Government, as the case may be, to exercise the power of entry, search and seizure to ensure
that the provisions of the DPCO have been complied with. The States which are yet to do
this are requested to do so at the earliest. Further, as part of the regular enforcement activity
of the Office of the State Drug Controller, on similar lines as done with respect to drug
sample testing under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules,
1945, every Drug Inspector should be given a monthly target for purchasing scheduled
formulations, preferably 5 to 10 samples a month, to verify price compliance, and report
8. National Pharmaceutical Pricing Authority
3rd
Floor, YMCA Cultural Centre
1 Jai Singh Road, New Delhi 110001
price violations for taking necessary action against erring manufacturers, importers,
marketers, and dealers (including retailers). The State Drug Controller may compile the
monthly reports of individual Drug Inspectors, and submit a monthly consolidated report
to NPPA in the following format:-.
The report should be accompanied with supporting documents such as photocopy of sample
pack with MRP, Batch No. and Manufacturing date, Name of Manufacturer and Marketer
(if applicable). While collecting samples from the market, preference may be given to those
formulations that are of mass consumption; each sample may be procured from 2 to 3
locations in order to get a geographical spread. Finally, the samples collected should
correspond to important therapeutic groups in relation to disease burden in the State. This
activity should be taken up with utmost sincerity in order to prevent consumer exploitation
and protect public interest
10. At present the DPCO 2013 contains 680 scheduled drug formulations spread across
27 therapeutic groups, which effectively comes to 628 scheduled drug formulations if we
net those appearing in more than one therapeutic group. As on date, the NPPA has fixed
and notified the ceiling prices with respect to 509 scheduled formulations, apart from
notification of annual WPI-linked revision whenever due. With regard to the remaining
119 scheduled drug formulations, 17, which are common to both DPCO 1995 and DPCO
2013, are not yet due for revision. With respect to the residual 102 scheduled drug
formulations, the NPPA has not been able to fix the ceiling prices due to non-availability of
corresponding market-based PTR data, efforts for which are continuously on, and those
ceiling prices shall be notified as soon as the said data is available.
11. TheCompendiumofNotifiedCeilingPricesofScheduledDrugs2015hasbeenbrought
out with the objective of disseminating information related to notified ceiling prices in respect
of scheduled drugs, to all stakeholders, particularly consumers and consumer welfare
Sl.No. Name and
address of
Manufacturer
and Marketer
in case of
separate
entities
Brand
Name, if
any
Pack
Size
Batch No. and
manufacturing
date
Maximum
Retail
Price
(MRP)
Ceiling
Price/
unit
Gazette
Notification
No. and
date
Remarks
(1) (2) (3) (4) (5) (6) (7) (8) (9)
9. organisations/ NGOs; manufacturers, including importers and marketers of
pharmaceuticals products; stockist/ distributors, dealers and retailers; doctors and public
health experts; and most importantly enforcement functionaries (NPPA, State Drug
Controller and Drug Inspectors) for carrying out monitoring and enforcement activities.
Apart from serving as a compendium of notified ceiling prices, it is also expected to help in
propagating the NLEM, which is basically aimed at promoting scientific and rational use of
medicines that is both clinically-effective and cost-effective.
12. I sincerely hope that all stakeholders will find this compendium extremely useful as
a ready reckoner. The enforcement functionaries may find this compendium useful in
carrying out monitoring and enforcement activities with regard to price compliance under
DPCO 2013. The NPPA has provided on its website an online facility to lodge complaints
related to price and availability of pharmaceuticals, which may be used by consumers, NGOs
and enforcement functionaries to report cases of overcharging or non-availability of
medicines, if any. A soft copy of the compendium is also placed on the NPPA website
www.npppaindia.nic.in along with copies of related Gazette of India Extraordinary price
notifications in PDF format. Although every effort has been made to maintain accuracy in
the compendium, the NPPA shall not be responsible for any error or mistake that may have
inadvertently crept into the compendium. The reader is, therefore, advised to refer to the
relevant official Gazette notification before taking any action on the basis of this
compendium.
(Injeti Srinivas)
National Pharmaceutical Pricing Authority
3rd
Floor, YMCA Cultural Centre
1 Jai Singh Road, New Delhi 110001