Last Updated on January 8, 2024 by The Health Master
The Drugs (Prices Control) Order (DPCO), 2013, and its existing reference have led the National Pharmaceutical Pricing Authority (NPPA) to decide to set a price cap on newly scheduled medications from the same manufacturer with significant inter-brand price variation at the cost of the least expensive brand or package size plus 10%.
The NPPA has released the National List of Essential Medicines (NLEM), 2022, with a total of 384 medicines, of which 34 are new medicines added to the list while 26 from the previous list were deleted due to various reasons.
After updating Schedule I of the DPCO, 2013, to reflect the updated list of essential medicines, it has also begun revising the ceiling prices for formulations that were kept in the NLEM, 2022, and for those that were added anew.
While fixing the prices, the Authority observed that when it comes to the formulations included in the NLEM 2022 for the first time, changing the non-scheduled formulations to scheduled formulations, there is large inter-brand variation in the prices in some of the formulations of the same company.
The Authority deliberated on the issue in its recent meeting and decided to address the price variation while fixing the prices of these formulations according to the revised Schedule I of the DPCO, 2013.
Based on an existing reference under DPCO, 2013, it has been decided that the Price to Retailer (PTR) of various brands or pack sizes of a formulation from one company may be capped at the price of the lowest brand or pack size plus 10%.
It also decided that the price of such formulations may be fixed under Para 19 of the DPCO, 2013 in public interest,
In spite of anything stated in the price control order, according to Paragraph 19 of the order, the government may, in the case of extraordinary circumstances, in the public interest, fix the ceiling price or retail price of any drug for such a period as it may deem fit.
Additionally, where the ceiling price or retail price of the drug is already fixed and notified, the government may allow an increase or decrease in the ceiling price or the retail price, regardless of annual wholesale price
According to paragraph 16 of the DPCO, 2013, “The annual price increase on such formulations may be allowed on the basis of WPI similar to other schedule formulations for which price is fixed under paragraphs 4 and 6 of the DPCO, 2013,” the Authority stated.
The Para 16 of the price control order is related to the revision of ceiling price of scheduled formulation, on or before April 1 of every year as per the annual WPI for preceding calendar year and related matters.
In its most recent batch of draft ceiling price calculation sheets, the NPPA has determined the price of a few brands of scheduled formulations based on its decision to address the issue of inter-brand price variation in its most recent batch of draft ceiling price calculation sheets released.
For instance, two different brands of the same formulation by a company have two different prices, at Rs 7.86 per unit for one brand and Rs 11.07 per unit for another one.
The NPPA, while considering these brands for the ceiling price fixation of the new drug, itraconazole 100 mg, considered the price of the formulation with Rs. 11.07 per unit as Rs. 8.65 per unit.
For the formulation teneligliptin 20 mg, prices for two brands from the same company ranged between Rs. 7.75 and Rs. 9.81 per unit.
The NPPA has calculated and considered the price of the brand at Rs. 9.81 per unit at Rs. 8.53 per unit, for the purpose of setting the ceiling price.
On February 9, the Authority released the 11th lot of the draft version of the calculation of the ceiling price for 50 formulations under the DPCO’s revised Schedule I for 2013.
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