Price fixation of drugs saves Rs 12,447 crores per annum, says NPPA data

Delhi: The Minister for Chemicals & Fertilizers, Shri. D.V. Sadananda Gowda informed the Lok Sabha today through written replies that fixation of prices has resulted in a total saving of Rs 12,447 crores per annum to the public after the implementation of the DPCO, 2013. The minister further informed that till now Demand Notices have been issued for an amount of Rs. 6406.33 crore. Amount to the tune of Rs. 960.38 crore has been deposited by the companies to the Government.

National Pharmaceutical Pricing Authority (NPPA) fixes the ceiling price of scheduled formulations adopted from National List of Essential Medicines (NLEM) and new drugs as per the provisions of para 4, 5 and 6 of the Drugs (Prices Control) Order, 2013 (DPCO, 2013). Further, the prices of the non-scheduled formulation are monitored so that their MRP is not increased by more than 10% of MRP during the preceding twelve months.

Shri. Gowda also informed the house that since the inception of the NPPA, 2083 demand notices (including suo-moto deposits) have been issued to pharmaceutical companies for their having overcharged consumers on the sale of formulations at prices above the ceiling price notified by the NPPA. Demand Notices have been issued for an amount of Rs. 6406.33 crore. Amount to the tune of Rs. 960.38 crore has been deposited by the companies to the Government.

The Minister elaborated steps taken by NPPA for making medicines available at an affordable price as below :

NPPA fixed the ceiling prices of 530 scheduled formulations under NLEM, 2011. The details of reduction in prices of scheduled formulations affected under the DPCO, 2013 as compared to the highest price prevailed prior to the price fixation is as below:

Further, Schedule-I of the DPCO, 2013 was amended by adopting NLEM, 2015. The NPPA has notified the ceiling prices of 866 scheduled formulations under NLEM, 2015. The details of reduction in prices of scheduled formulations affected under the DPCO, 2013 as compared to the highest price prevailed prior to the price fixation is as below:

NPPA fixed prices of 106 Anti-diabetic and Cardiovascular drugs under Para 19 of DPCO, 2013 in Public interest.

NPPA has a fixed ceiling price of Cardiac Stents being scheduled formulation under DPCO, 2013 affecting price reduction for Coronary Stents worked out up to 85% for Bare Metal Stents and 74% for Drug-Eluting Stents.

NPPA has a fixed ceiling price of Orthopedic Knee Implants under Para 19 of DPCO, 2013 in Public interest affecting price reduction for orthopaedic Knee Implants worked out up to be 69%.

NPPA capped the Trade Margin of non-scheduled formulations of 42 select Anti-cancer medicines under "Trade Margin Rationalization" approach as a Pilot for proof of concept, wherein the price of above 500 brands of medicines was reduced upto 90%.

Shri. Gowda also informed the house that since the inception of the NPPA, 2083 demand notices (including suo-moto deposits) have been issued to pharmaceutical companies for their having overcharged consumers on the sale of formulations at prices above the ceiling price notified by the NPPA. Demand Notices have been issued for an amount of Rs. 6406.33 crore. Amount to the tune of Rs. 960.38 crore has been deposited by the companies to the Government.

An amount of Rs. 4032.91 crore is under litigation. The demand notices are issued under various provisions of the DPCO, 1995 and the DPCO, 2013 read with Section 7A of the Essential Commodities Act, 1955. The Detailed list of overcharging cases where demand notices have been issued is available on NPPA's website www.nppaindia.nic.in.

National Pharmaceutical Pricing Authority (NPPA), as an ongoing process, fixes the ceiling prices of the formulations as and when formulations are included in the National List of Essential Medicines (NLEM). The NPPA monitors the prices of both scheduled and non-scheduled formulations on a regular basis to check to overcharge by pharmaceutical companies. Whenever companies are found to be overcharging the consumer in the sale of medicine, NPPA issues notices to the companies to deposit the overcharged amount along with applicable interest under section 7A of Essential Commodities Act, 1955.

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