NPPA to fix ceiling prices based on existing methodology

Last Updated on January 4, 2024 by The Health Master

The National Pharmaceutical Pricing Authority (NPPA), which has fixed the ceiling price of 651 formulations till the end of March, 2023, has said that for the rest of the scheduled formulations for which prices are to be calculated, it will first compute the prices based on the methodology it has announced earlier and will arrive at a final ceiling price by applying the Wholesale Price Index (WPI) increase of 12.12 per cent on it.

The Authority in its latest meeting, has fixed the ceiling prices of 20 scheduled formulations under the revised Schedule I of the Drugs (Prices Control) Order, 2013, based on this decision. It has also fixed the retail price of 15 new drugs based on applications from individual companies.

NPPA has finalised the methodology for fixing the ceiling prices of scheduled formulations under the revised Schedule 1, which replaced the National List of Essential Medicines (NLEM), 2015 with the 2022 list.

While the general practice is that the ceiling prices are fixed considering the market-based data available for the month ending immediately before six months of the notification of the revision of the Schedule I.

However, the Authority decided to use the data from July, 2022, paying heed to the representations from the industry associations that the data of April, 2022 would not reflect the existing Price to Retailer (PTR) or Maximum Retail Price (MRP), considering the ceiling price revision carried out in the beginning of April, 2022 based on the WPI issued in March, 2022.

The prices again underwent a change in April, 2023, based on the WPI arrived at in March, 2023, amidst the NPPA revising and fixing the ceiling prices based on the NLEM, 2022.

It is in this context, the NPPA decided in its latest meeting held on May 1, 2023, to follow a methodology under which the prices shall be first computed on the basis of market database for the month of July, 2022 by following the methodology agreed upon in the previous meetings. For arriving at the ceiling price, the WPI increase of 12.1218 per cent shall be applied on the prices as computed based on this methodology.

“…similar methodology was applied while fixing the ceiling prices under NLEM, 2015,” said NPPA. The methodology was decided in the 27th Authority meeting held on March 29, 2016 based on the data from the data agency Pharmatrac for August 2015 after giving effect of WPI which was reduced at 2.7015 per cent, with effect from April 1, 2016.

“It was also noted in the 27th Authority meeting that such principle i.e giving effect of WPI was being followed consistently for fixation of ceiling price under original Schedule I of DPCO, 2013 and hence would be followed uniformly while fixing the ceiling price of the schedule formulation under revised Schedule I,” it added.

The Authority has fixed the ceiling prices for 20 scheduled formulations based on this methodology.

Of this, for 12 formulations were fixed under the Paragraph 4(1) of the DPCO, 2013 including:

• Gentamicin injection 40 mg/ml in 2ml and 1.5 ml formulations,
• Dexamethasone injection 4mg/ml in 2ml and 5 ml formulations,
• Paracetamol injection 150 mg/ml at 2 ml,
• Japanese encephalitis vaccine 4mcg to 6 mcg,
• Clomiphene citrate capsule 50 mg,
• Fluoxetine tablets 10 mg, 20 mg, 40 mg, 60 mg

The Para in the DPCO details two steps to calculate the ceiling price of a scheduled formulation of specific strength and dosage as specified under the schedule.

It has also fixed the ceiling price of the other eight scheduled formulations under the Para 6(1) of the DPCO, 2013, in the latest meeting. The Para details on the methodology to calculate the ceiling price of a scheduled formulation in case of no reduction in price due to absence of competition.

The list of drugs for which the ceiling prices were fixed under this Para include:

• Povidone iodine solution,
• Risperidone injection (long acting) 25 mg and 37.5 mg,
• Japanese encephalitis vaccine upto 3 mcg,
• Clomiphene citrate capsule 100 mg,
• Azithromycin capsule 500 mg,
• Efavirenz capsule 200 mg,
• Fluconazole capsule 100 mg.

With the latest list, the NPPA has so far fixed the ceiling price of 671 scheduled formulations under the revised Schedule I of the DPCO, 2013.

The Department of Pharmaceuticals has notified the revision of the Schedule I with the NLEM, 2022, on November 11, 2022 and the NPPA started the procedures to fix or revise the ceiling prices of a total of 954 formulations, comprising 388 medicines, following this.

The Authority, in its latest meeting, also fixed the retail prices of 15 new drugs based on applications filed by manufacturers and marketers.

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