NPPA extends price cap on LMO and Oxygen inhalation

The Authority has also decided to initiate necessary action for violation of the provisions of DPCO, 201

NPPA National Pharmaceutical Pricing Authority
Picture: Pixabay

Last Updated on January 4, 2024 by The Health Master

The National Pharmaceutical Pricing Authority (NPPA) has extended the period for price cap on liquid medical oxygen (LMO) and oxygen inhalation (medicinal gas) up to December 31, 2021, in public interest.

The Authority, in a meeting held on September 8, also fixed retail prices of 23 new drugs, which are to be notified after 10 working days from the publication of the minutes of the meeting.

The Authority said that the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, through an Office Memorandum on August 31, 2021, which discussed the price regulation, recommended that the prices of the LMO and medicinal gas may further be extended till December 31, 2021 after which the issue may be reviewed by the Department again.

The minutes of the NPPA meeting further concluded that the Authority considered the matter and in view of continuing extraordinary circumstances due to the C-19 pandemic decided that the revised price of liquid medical oxygen (LMO) and oxygen inhalation (medicinal gas) fixed through the order on September 25, 2020, and extended twice thereafter, be further extended up to December 31, 2021 or until further order, whichever is earlier, in public interest.

Picture: Pixabay

The NPPA in its order on September, 2020, observed that the demand for medical oxygen has gone up almost four times, from 750 MT per day to around 2,800 MT per day, due to C-19 pandemic.

During the pandemic, around 50 percent of the total liquid oxygen production is being used for medical purposes in comparison to around 15 per cent usage during the pre C-19 period.

“It is therefore imperative to cap the price of LMO to ensure uninterrupted availability of medical oxygen through cylinders to hospitals and consumers,” it said.

Medicinal gas is a scheduled formulation under the amended Schedule I of Drugs (Prices Control) Order [DPCO], 2013, and NPPA had notified its ceiling price as Rs 17.49 per cubic meter excluding Goods and Service Tax (GST) from March 25, 2020.

Looking at the C-19 situation and the consumption trends of medical oxygen in the country, the Union ministry of health and family welfare has delegated powers to NPPA to take steps to immediately regulate the availability and pricing of LMO and medical oxygen cylinders.

An interministerial committee constituted by the NPPA to monitor prices of APIs and formulations needed for C-19 also recommended capping the prices of these products.

The Authority, through the order, fixed the ex-factory maximum price of LMO at Rs 15.22 per cubic meter, excluding GST and Rs 25.71 for medicinal gas per cubic meter in cylinder, inclusive of inward transportation cost incurred for LMO up to filler.

The manufacturers not complying with the price cap, shall be liable to deposit the overcharged amount along with interest thereon under the provisions of the DPCO, 2013 read with the Essential Commodities Act, 1955, said the order.

In the 92nd meeting of the Authority under DPCO, 2013 on September 8, chaired by NPPA Chairman Kamlesh Kumar Pant, the Authority has also approved the retail prices of the 23 new drugs including levetiracetam in 0.82 per cent sodium chloride injection, from Sun Pharma at Rs 91.56 per pack, efaviranz + tenofovir disproxil + lamivudine tablet from Cipla Ltd at Rs. 59.80 per tablet, various strengths of dapagliflozin + metformin hydrochloride manufactured by Synokem Pharmaceuticals for Aristo Pharmaceuticals, among others.

The Authority has also decided to initiate necessary action for violation of the provisions of DPCO, 2013, against Linux Laboratories for launching one of its formulations in July, 202, without prior price approval.

The retail price of its formulation will be calculated based on the data six months prior to its launch date, that is December 2019, it said. However, since the data was not available for the month, the Authority did the calculation based on January, 2020 data.

It has also noted that in respect of retail price of new drugs which have become off-patent, the retail price has been fixed based on Form V data, submitted by the companies.

The regulator observed that the off-patent price as given based on Form V data may be appearing in AIOCD Pharma AWACS database after its introduction in the market.

The Authority opined that fixation of retail price of off-patented drugs based on market based data as per AWACS database, in respect of drugs whose retail price has been fixed based on Form V data for a considerable period, may be explored.

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