NPPA Takes Measures to Ensure Price Transparency in Pharmaceutical Market

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The National Pharmaceutical Pricing Authority (NPPA) has reaffirmed its commitment to maintaining transparency and preventing overcharging in the pharmaceutical market, in accordance with the provisions of the Drug Price Control Order (DPCO) 2013. A press release on its measures was issued on December 8, 2023.

As per existing regulations, every manufacturer producing a scheduled or non-scheduled formulation for sale must prominently display the maximum retail price (MRP) on the label of the container, along with the words “Maximum Retail Price” and “inclusive of all taxes.” Additionally, manufacturers are required to issue a price list to dealers, who must prominently display it on their business premises. The DPCO, 2013 strictly prohibits the sale of any formulation to consumers at a price exceeding the specified price in the current price list or the labeled MRP, whichever is lower.

The NPPA plays a crucial role in fixing the ceiling price of scheduled formulations under the DPCO, 2013. The process involves calculating the simple average of the price to the retailer (PTR) for all branded-generic and generic versions of a particular formulation with a market share of one percent and above. The MRP for the formulation should not surpass the notified ceiling price, inclusive of applicable taxes.

Furthermore, the DPCO, 2013 empowers the NPPA to fix ceiling prices in cases where competition is absent and for the retail prices of new drugs, as defined in the order, for existing manufacturers of scheduled formulations.

The NPPA emphasizes that any instances of overcharging are dealt with under the relevant provisions of the DPCO, 2013. However, the authority clarifies that concessions offered to customers by medical stores within the MRP are guided by commercial considerations and fall outside the ambit of the control order.

Detailed information about the prices fixed by the NPPA can be accessed on the official website of the authority.

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