The National Pharmaceutical Pricing Authority (NPPA) has issued a four notifications regarding the fixation of retail prices for new drugs and scheduled formulations. This action aims to regulate drug prices in the country. These notifications were issued on May 15, 2024.
Types of Formulations Covered
I. Price Fixation for New Drug Formulations
The National Pharmaceutical Pricing Authority (NPPA) has set maximum prices for certain new drug formulations made by specific companies. These prices do not include any Goods and Services Tax (GST) and only apply to the specific dosages, strengths, and quantities listed in the official announcement.
These prices are only valid for the named manufacturers or marketers who applied to have their prices set or revised. Such application should have been made by submitting the required form (Form-I) as outlined in the Drugs (Prices Control) Order, 2013 (DPCO 2013).
Additionally, these companies must still meet all the legal requirements set by the government. This includes having a valid manufacturing license issued by the appropriate authority, either the Central Licensing Authority or the State Licensing Authority, as the case may be.
II. Price Fixation for Scheduled Formulations
Additionally, NPPA has also fixed ceiling prices for certain scheduled formulations. The ceiling prices specified are exclusive of GST and apply to the respective dosage forms, strengths, and units detailed in the entries.
Drug companies that manufacture scheduled formulations must lower their prices if they’re currently charging more than the new ceiling price set by the government. This ceiling price doesn’t include Goods and Services Tax (GST). Companies can sell their brand-name or generic versions of these medications, but neither can exceed the ceiling price once it’s added to any applicable GST.
However, if a company is already selling these controlled medications for less than the new ceiling price, they can continue to do so.
Compliances Arising From Price Fixations:
Inclusion of GST
The manufacturers may add goods and services tax only if they have paid actually or if it is payable to the Government on the ceiling price.
Furnish Price List to NPPA, Drug Controller and Dealers
The manufacturer shall issue a price list in Form–V from date of Notification to NPPA through IPDMS and submit a copy to State Drug Controller and dealers.
Display of Price Lists
Every retailer and dealer shall display price list and the supplementary price list, if any, as furnished by the manufacturer, on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same.
These measures represent NPPA’s ongoing efforts to ensure affordability and accessibility of essential drugs for the Indian population. The new prices will be effective upon their final publication, marking a significant step towards regulating pharmaceutical pricing and promoting public health interests.
