Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

[pib] National Pharmaceutical Pricing Authority (NPPA)

Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields
Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Pharmaceutical Pricing Authority (NPPA)

Why in the News?

The NPPA monitors the prices of scheduled as well as non-scheduled medicines under Drugs (Prices Control) Order, 2013 (DPCO, 2013), informed the Union Minister of State for Chemicals and Fertilizers.

What are Scheduled and Non-Scheduled Formulations?

[A] Scheduled Formulations:

  • Defined as formulations listed in Schedule-I of the Drugs (Prices Control) Order, 2013 (DPCO, 2013).
  • Ceiling prices of these formulations are revised annually based on the Wholesale Price Index (WPI) for the preceding calendar year.
  • National Pharmaceutical Pricing Authority (NPPA) is responsible for revising and notifying these prices.

[B] Non-Scheduled Formulations:

  • Defined as formulations not included in Schedule-I of the DPCO, 2013.
  • Prices of these formulations can be increased by manufacturers, but the Maximum Retail Price (MRP) cannot be increased by more than 10% during the preceding 12 months.
  • NPPA also monitors the prices of non-scheduled formulations to ensure compliance.

Action is taken against companies selling formulations at prices higher than permissible, and overcharged amounts are recovered.

About National Pharmaceutical Pricing Authority (NPPA)

  • NPPA was set up as an independent regulator on August 29, 1997, for drug pricing and ensuring affordable access to medicines.
  • It is an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers.
  • NPPA is not a Statutory or Constitutional Body.
  • It is responsible for implementing and enforcing the provisions of the DPCO.

Functions of NPPA:

  • Fixation and revision of prices of ‘Scheduled’ drugs under Drug (Price Control) Orders.
    • Scheduled drugs (15% of the pharma market) are allowed an increase based on WPI.
    • Non-scheduled drugs (85% of the pharma market) are allowed an automatic 10% increase annually.
  • Monitoring and enforcement of drug prices.
  • Ensuring availability and accessibility of all medicines and medical devices, including non-scheduled drugs.
  • Undertaking or sponsoring studies on drug pricing.
  • Collecting and maintaining data on production, exports, imports, market share, and profitability of pharmaceutical companies.
  • Advising the Central Government on changes or revisions in drug policy.

Back2Basics: Drugs (Prices Control) Order (DPCO)

  • The DPCO is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
  • The Order provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions etc.
  • Under the provisions of DPCO 2013, only the prices of drugs that figure in the National List of Essential Medicines (NLEM) are monitored and controlled by the regulator, the National Pharmaceutical Pricing Authority.
    • Essential medicines are those that satisfy the priority healthcare needs of the majority of the population.

 

PYQ:

[2019] How is the Government of India protecting traditional knowledge of medicine from patenting by pharmaceutical companies?

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