(a) whether the life saving drugs have not been defined in the Drugs (Prices Control) Order, 1995;
(b) if so, the reasons therefor and its impact on the common people, who are in need of life
saving drugs;
(c) the manner in which the National Pharmaceuticals Pricing Authority (NPPA) monitors the
prices of all formulations including imported formulations; and
(d) the mechanism followed by NPPA in calculating the prices of domestic or imported drugs
or formulations?
MINISTER OF STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF CHEMICALS AND FERTILIZERS AND
MINISTER OF STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF STATISTICS AND PROGRAMME
IMPLEMENTATION (SHRI SRIKANT KUMAR JENA)
(a) to (c) There is no classification as ‘life saving drugs/medicines’ under Drugs (Prices
Control) Order, 1995 (DPCO, 1995). Under the provisions of the DPCO, 1995, the prices of 74
scheduled bulk drugs and the formulations containing any of these scheduled drugs are controlled.
National Pharmaceutical Pricing Authority (NPPA) fixes or revises prices of scheduled drugs/
formulations as per the provisions of the DPCO, 1995. No one is authorized to sell any scheduled
drug / formulation at a price higher than the price fixed by NPPA / Govt.
In respect of drugs not covered under the DPCO, 1995 i.e. non scheduled drugs, manufacturers
fix the prices without seeking the approval of Government/NPPA. However, as a part of price-
monitoring activity, NPPA regularly examines the movement in prices of non-scheduled
formulations. Wherever a price increase beyond 10% per annum on moving basis is noticed,
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.
The NPPA monitors the prices of all formulations including imported scheduled formulations that
are under price control. To ensure that companies adhere to the prices fixed by NPPA, the State
Drug Controllers are sensitized and asked to forward the cases relating to non-compliance of the
notified price. As a part of continuous market surveillance, NPPA also procures samples of
various scheduled formulations to check the compliance of the notified ceiling price by the
companies.
(d) NPPA fixes or revises prices of domestic scheduled formulations as per formula contained
in para 7 of the DPCO, 1995 which provides for 100% Maximum Post Manufacturing Expenses (MAPE)
to cover all costs incurred by the manufacturer from the stage of ex-factory cost to retailing
and includes trade margin and margin to the manufacturer. The prices of imported scheduled
formulations are fixed/revised as per proviso to para 7 of the DPCO, 1995 which provides for
a maximum margin of 50% on the landed cost to cover selling and distribution expenses including
interest and importer’s profit.