The drugs price regulator National Pharmaceutical Pricing Authority (NPPA) on 11 May 2016 fixed the ceiling price of 54 drug formulations used for treatment of cancer, diabetes rheumatoid arthritis, bacterial infections and hypertension.
The ceiling prices were revised/fixed by NPPA as per the Schedule-I under Drugs (Price Control) Amendment Order (DPCO), 2016.
Apart from this, it also fixed the retail price of 11 formulations under DPCO, 2013, which covers 680 formulations.
DPCO, 2013 was notified on 15 May 2013 replacing the 1995 order that regulated prices of only 74 bulk drugs.
How the prices are fixed and regulated?
• The prices of essential drugs are fixed on the basis of the simple average of all medicines in a particular therapeutic segment, having sales of more than 1 percent.
• It regulates the prices of all other medicines, while companies are allowed to hike prices of such drugs by up to 10 per cent in a year.
National Pharmaceutical Pricing Authority (NPPA)
• Set up in 1997, the NPPA is a government organisation that controls the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995.
• The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.
• It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.