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The government today approved a policy for procuring medicines produced by Central PSUs, a move which aims at optimum utilisation of such units while ensuring availability of medicines at lower prices.
The policy will be applicable to 103 medicines for five years and will be consumed by central government departments, Public Sector Undertakings and autonomous bodies.
"The Union Cabinet today approved the Pharmaceuticals Purchase Policy (PPP) for a period of five years from the date of issue of orders by the Department of Pharmaceuticals," said an official release, adding that the list of medicines may be reviewed and revised by the department as per requirements.
The renewal of the policy is aimed at ensuring optimum utilisation of the installed capacity of the pharma CPSEs. It would not only provide necessary fillip in reviving these CPSEs, which are ailing but also ensure availability of quality medicines at low prices to the masses...," it said.
The policy will also be applicable to purchase of medicines by state governments under health programmes funded by the government such as the National Rural Health Mission, it said.
The pricing of the drugs will be done by the National Pharmaceutical Pricing Authority (NPPA) using the cost-based formula as mentioned in the Drugs Price Control Order, 95, the release said.
"A uniform discount of 16 per cent would be extended to all products. All the taxes, whatsoever, would have to be passed on to buyers," it said, adding that the annual revision of prices would be linked to Wholesale Price Index as per provisions contained in Drugs Prices Control Order, 2013.
The policy will extend only to CPSEs, which are under the administrative control of Department of Pharmaceuticals, such as Indian Drugs and Pharmaceuticals Ltd; Hindustan Antibiotics Ltd; Bengal Chemicals and Pharmaceuticals Ltd; Karnataka Antibiotics and Pharmaceuticals Ltd and Rajasthan Drugs and Pharmaceuticals Ltd and their subsidiaries where government owns 51 per cent or above shares, it said.
Further, it said, the procuring entity will purchase from pharma PSUs and their subsidiaries subject to their meeting Good Manufacturing Practices (GMP) norms as per Schedule 'M' of the Drugs & Cosmetic Rules.
In case pharma PSUs and their subsidiaries fail to supply the medicines, procuring entity would be at liberty to make purchases from other manufacturers.
If the pharma CPSEs or their subsidiaries fail to perform as per the purchase order, they would also be subject to payment of liquidated damages or any other penalty as per the terms of the contract, it said.
