National pharmaceutical pricing authority.pdf

National pharmaceutical pricing authority

1. P R Patil Institute of Pharmacy Talegaon SP Wardha
Presented By
Ashish R. Chaudhari
(M.Pharm)
Asst. Professor
P R Patil Institute of Pharmacy
Talegaon SP Wardha

2. INTRODUCTION
Drugs playan importantroleinthehealthofbothpeople andthe
economyofacountry.
must be regulated to ensurethattheymeetprescribedstandards.
Therefore, effective drug regulation is required to ensure thesafety,
efficacy andqualityofdrugs aswellasaccuracy andappropriatenessof
the drugs.

3. DRUGREGULATORYSYSTEMIN INDIA
⚫DRUGSREGULATORY SYSTEMIN INDIAisgoverned by both Centre
and State Governments under the Drugs & CosmeticsAct, 1940.
⚫MAINBODIES
CENTRALDRUGSTANDARDCONTROL
ORGANIZATION (CDSCO)
MINISTRYOFHEALTHANDFAMILYWELFARE
INDIANCOUNCILOFMEDICALRESEARCH (ICMR)
MINISTRYOFCHEMICALANDFERTILIZER
MINISTRYOFSCIENCEANDTECHNOLOGY
MINISTRYOFCOMMERCE.

4. MINISTRYOFCHEMICALAND FERTILIZER
DEPARTMENT OFPHARMACEUITICAL ORGANIZATION
ANDSTRUCTURE.
NATIONALPHARMACEUTICALPRICINGAUTHORITY
(NPPA)
ACTIVITIESANDRESPONSIBILITIES:
AllmattersrelatingtoNPPAincludingitsfunctionsofprice
controlandmonitoring.
Responsiblefordevelopmentofinfrastructure,manpowerandskillsforthe
pharmaceuticalsector.

5. NATIONALPHARMACEUTICALPRICING
AUTHORITY(NPPA)
The NationalPharmaceuticalPricingAuthority(NPPA),an
independent body of experts in the Ministry of Chemicals and
Fertilizerswas formedby theGovt. ofIndiaat1997.
NPPAisan organizationof theGovernmentof Indiawhich was
established to fix/ revise the prices of controlled bulk drugsand
formulationsandtoenforce

6. ORGANIZATION
Chairman
MemberSecretary
Advisor(Pricing)
Director(FormulationDivision)
Director(Monitoring&EnforcementDivision)
Director(LegalDivision)
Director(AdminDivision)

7. FUNCTIONSOFNPPA
⚫ToimplementandenforcetheprovisionsoftheDrugs(PricesControl)
Orderinaccordancewiththepowersdelegatedtoit.
⚫Todealwithalllegalmattersarisingoutofthedecisionsof theAuthority;
⚫Tomonitortheavailabilityofdrugs,identifyshortages,if any,andtotake
remedialsteps;
⚫TorenderadvicetotheCentralGovernmentonchanges/ revisionsinthedrug
policy

8. DRUGPRICECONTROL ORDER (DPCO) 2013
Thedrugpricecontrolorder(DPCO)isanorderissuedbythe
governmentundertheEssentialCommoditiesAct1955,which
enablesittofixthepricesofsomeessentialbulkdrugsand
theirformulations.
The origin of this control dates back to 1970 when for the first
time the government placed limits on profitability of
pharmaceutical companies.

9. ObjectiveofDPCO
Toensureavailability,atreasonablepricesofessentialand
life savingandprophylacticmedicinesofgoodquality.
Promoting the rational use of drug in country to encourage
cost effective production with economic sizes.

10. DPCOprovides
Thelistof pricecontrolleddrugs.
›Proceduresforfixationofpricesofdrugs.
›MethodofimplementationofpricesfixedbyGovernment.
›Penaltiesforcontraventionof provisions
Allformulationscontainingthebulkdrugseitherinasingleor
combinationformfallunderthepricecontrolcategory

11. MainFeaturesoftheDPCO2013
1)Theneworderwillbring348drugs&their652formulationsunderpricecontrol
2)Marginsofwholesalers&retailershave beencutdownto8%&16%
respectively.
3)Existingfirmswillnotbeallowedtostopproductionofanydrugwithout
permissionfromthe government.
4)Firmsthatlaunchnewmedicinescansellthematorbelowgovernment-setprice
caps.
5)The ceiling price would be calculated by taking the simple average of prices of all
brands of a drug

12. SCHEDULES
I.SCHEDULE1:containsthenational listof essentialmedicines,
2011dividedinto 27sections. (348essentialdrugs )
II.SCHEDULE2:containsvariousformsforapproval orrevisionof
pricesofscheduledformulations.

13. PRICESOFBULK DRUGS
PRICESOFBULKDRUGSOTHERTHANTHOSE SPECIFIED INFIRSTSCHEDULE
Manufacturersofsuchdrugs arerequiredtofurnishalldetailsto the
government within30daysof thecommencementoforder toenable
thegovernmenttofixtheirprices.
Incaseof manufactureofnewdrugsdetailshavetobegivento the
government within14 daysofthecommencementof manufacture.
Ifamanufacturerorimporterofbulkdrugsfailstofurnish
requireddetails,thegovernmentcanfixitspricebasedon
availableinformation.

15. RETAILPRICEOFFORMULATIONS
Forcalculationofretailprice of anydrugformulationthe following
formulaisused;
R.P=(M.C +C.C+ P.M+P.C)x1 +MAPE/100 + E.D
R.P-RetailPrice
M.C-MaterialCost(inclusiveofprocessinglosses)
C.C-ConversionCost
P.M-PackingMaterialcost
P.C-PackingCharges
MAPE-Maximum Allowable Post Manufacturing
Expenses(inclusive of trademargins)
E.D-ExciseDuty

16. CEILING PRICE
Step1:FirsttheAveragePricetoRetailerofthescheduledformulationi.e.P(s)
shallbecalculatedasbelow:
AveragePricetoRetailer,P(s)=(Sumofpricestoretailerofallthebrandsandgeneric
versionsofthemedicinehavingmarketsharemorethanorequaltoonepercentofthe
totalmarketturnover)/(Totalnumberofsuchbrandsandgenericversionsofthe
medicinehavingmarketsharemorethanorequaltoonepercentoftotalmarket
turnoveronthebasisofmovingannualturnoverforthatmedicine.)
Step2.Thereafter,theceilingpriceofthescheduledformulationi.e.P(c)shall
becalculatedasbelow:
where
P(s)=AveragePricetoRetailer
M=%Margintoretaileranditsvalue=16%
P(c) = P(s).(1+M/100)

17. MAXIMUM RETAILPRICE
Themaximumretailpriceofscheduledformulations shall befixedbythe
manufacturerson thebasis of ceilingpricenotifiedby theGovernment plus
local taxeswhereverapplicable,asunder:
MaximumRetailPrice=Ceilingprice+Local Taxes
Themaximumretailpriceofanew drug shallbe fixedby the
manufacturerson thebasisof retailprice determinedby the Government
pluslocaltaxes whereverapplicable,asunder:
MaximumRetailPrice=RetailPrice+LocalTaxesas applicable

18. 1.A Text book of Pharmaceutical Jurisprudence by Dr. B. S. Kuchekar
2.Drugspricecontrolorder,2013.
3.Atextbookof ForensicpharmacybyB. M. Mithal
REFERENCE