DoP exempts pharmaceutical companies from lowering drug prices based on WPI

NPPA insisted that all companies revise prices based on WPI even if prices are below ceiling price

In a relief to the pharmaceutical industry, the Department of Pharmaceuticals has ordered that companies already selling drugs at a price lesser than the ceiling price fixed by the NPPA will not have to revise prices based on the Wholesale Price Index. 

The Department of Pharmaceuticals said that the pharma pricing regulator "erred" when it said that even prices of the drugs with Maximum Retail Price below the actual ceiling price fixed by the NPPA should be revised. The Department's order says, "NPPA is therefore directed to revise the Ceiling Price of Schedule I medicines each year in accordance with the WPI revision.

Individual companies/ brands/ medicines which are already having an MRP below or equal to such WPI adjusted Ceiling Price shall not be required to reduce the MRPs any further vis-a-vis the WPI."

The Indian Pharmaceutical Alliance argued, "The DPCO 2013 mandates reduction of prices only with reference to the Ceiling Price and not the MRPs." 

The Indian Pharmaceutical Alliance, a body of pharmaceutical majors had asked the Department of Pharmaceuticals to consider this move saying that 5000-odd small and medium enterprises will benefit from the move.

According to the old rules, pharmaceutical companies have to revise their prices based on the Wholesale Price Index of the previous year. 

This petition was filed by the Indian Pharmaceutical Alliance early last year and was one of pain points for the pharmaceutical industry. This added to the existing tension between the NPPA and the pharmaceutical companies. 

Previously, the NPPA insisted that all companies revise their prices as based on the Wholesale Price Index even if their prices are much below the ceiling price fixed by the pharmaceutical pricing authority. The NPPA fixes prices of drugs that are part of the National List of Essential Medicines. Prices of 530 drugs have been fixed by the NPPA.