The National Pharmaceutical Pricing Authority (NPPA) has clarified that the exemption granted to small scale industrial units (SSIs), in fixing prices for non-ceiling packs of scheduled formulations, is not automatic and across-the-board.
Industry sources said the move could have been prompted by reports that several large companies had been following the SSI route to avoid price control.
Small scale units are required to fulfill three conditions before availing the exemption:
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l The unit or company should be independent and not a subsidiary of, or owned or controlled in any manner by any other undertaking that is not exempt from the provisions of the Drugs (Prices Control) Order.
l The formulations should be marketed by the concerned unit or company in their own brand names and trade marks or in the brand name or trade name of any other small scale industry unit.
l A declaration complying with both the above conditions, along with a copy of registration certificate as an SSI unit, should be submitted to the government within 60 days from the date of commencement of production, in case of new units.
The exemption is granted only to those products manufactured in their own factories under their own registration certificate or in the factory of any other SSI.
Any manufacturing unit selling the drug formulations in violation of the provisions of the Drugs (Prices Control) Order, 1995, is liable to penal action in accordance with the provisions of the Essential Commodities Act, and will also have to pay the overcharged amounts to the government.
According to a press note issued by the NPPA, several SSIs that did not qualify for the exemption were found to be manufacturing and selling drugs on the assumption that their status as SSI per se accords exemption for their products. >