MINISTER OF THE STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION AND
MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI SRIKANT KUMAR JENA)
(a): National Pharmaceutical Pricing Authority (NPPA) fixes/revises price of scheduled drugs/formulations as
per the provisions of Drugs (Prices Control) Order, 1995 (DPCO, 1995). Under the provisions of the DPCO, 1995
the prices of 74 bulk drugs included in its Schedule-I and the formulations containing any of these scheduled
drugs are controlled. The prices of scheduled bulk drugs are fixed / revised under para 3 of DPCO, 1995 by a
detailed Cost cum Techno- Economic Study done based on the information / data furnished by the manufacturers.
The mechanism involved in fixing / revising the prices of bulk drugs is as follows;
i.Collection of data by issuing questionnaire to the manufactures,
ii. Verification of the data submitted by the manufacturers.
iii. Preparation of the cost statement based on technical parameters and
cost details considered in the study.
iv. Approval of the price thus worked out by the members of the Authority,
v. Notification of the maximum sale price of bulk drug in official gazette.
However, under certain circumstances when the manufacturers fail to furnish information for price fixation
/ revision, the price of the bulk drug is fixed / revised as per the available information under para 11 of
DPCO, 1995.
In respect of drugs - not covered under DPCO, 1995 i.e. non-scheduied drugs, manufacturers fix the prices
by themselves without seeking the approval of Government/NPPA.
(b) & (c): NPPA fixes/revises price of scheduled drugs/formulations as per the provisions of DPCO, 1995.
As a part of price monitoring activity, NPPA regularly examines the movement in prices of non-scheduled
formulations also. Wherever a price increase beyond 10% per annum is noticed, the manufacturer is asked
to bring down the price voluntarily failing which, subject to prescribed conditions, action is initiated
under paragraph 10(b) of the DPCO, 1995 for fixing the price of the formulation in public interest. No
one can sell any drugs/formulation at a price higher than the price fixed by NPPA.
However, a number of drug companies have been found to be selling medicines at a higher price to consumers
in violation of the prices notified by NPPA. In such cases, NPPA initiates action for overcharging based
on the report from State Drug Controllers (SDCs), complaints from individuals, verification of price list
submitted by companies and suo-moto purchase of samples of scheduled packs. In case, a company is found
selling drugs / formulations at a price higher than the prices fixed by NPPA, appropriate action is initiated
against them by NPPA under para 13 of the DPCO, 1995 and the Essential Commodities Act, 1955, The demand
notices are issued to the Pharma companies in case of confirmed overcharging cases.
Further, since its inception in August, 1997 NPPA has fixed prices in case of 30 formulation packs under para
10(b) of DPCO, 1995 based on monitoring of prices of non-scheduled formulation, and companies have reduced
price voluntarily in case of 65 formulation packs. Thus in all, prices of 95 packs of non-scheduled drugs
have got reduced as a result of intervention of NPPA.
(d): During the last three years and the current year (upto 31st July, 2011), details of the demand notices
NPPA issued to the Pharmaceuticals companies, based on detection of overcharging cases, alongwith the details
of overcharged amount including interest demanded as well as the amount recovered from the Pharmaceuticals
companies during the relevant years are given below:
SI. Year No. of Cases Overcharged Amount
No. Amount received including interest (Rs. in crores) (Rs. in crores)
1 2008-09 135 435.62 51.41
2 2009-10 89 156.22 35.41
3 2010-11 49 188.17 17.26
4 2011-12 (upto 19 18.69 2.54 July 11)
(e): Life saving drugs are not defined in the DPCO, 1995. NPPA is, however, entrusted with the responsibility
of monitoring the availability of drugs and to identity shortage, if any, and to take remedial steps to make
the drugs available. NPPA is carrying out this responsibility mainly through monthly field reports from the
State Drugs Controller and other available information. As and when the reports for shortage of particular
drug(s), in any part of the country are received, the concerned company is asked to rush the stock and to
make the drugs available.
Further, a Campaign in the name of `Jan Aushadhi Campaign1 has been launched by the Department
of Pharmaceuticals with the purpose to make available medicines at affordable prices for all.
Under this campaign less priced quality unbranded generic medicines are made available through
Jan Aushadhi Stores. At present 105 Jan Aushadhi Stores have been opened till July.2011 in various
states in the country.
