NPPA cuts prices of controlled drugs

Even as drug regulator National Pharmaceutical Pricing Authority (NPPA) notified a 4.58 per cent price cut on price-controlled medicines, Chemicals Minister Ram Vilas Paswan said the price reduction, triggered by the excise duty cut, should be on all drugs sold in the country.

"We will ask the manufacturers and traders to reduce the prices of medicines and the NPPA is looking into this" Paswan told Business Standard on the sidelines of a petrochemical conference in Mumbai organised by the Confederation of Indian Industry (CII).

He said the NPPA would be given a free hand in bringing down the prices of all essential medicines.

Paswan's fresh attempts to reduce drug prices come in the wake of the government's Budget announcement that the excise duty on all drugs had been reduced from 16 per cent to 8 per cent. The government had also reduced Customs duty on specified life-saving drugs from 10 per cent to 5 per cent and provided total Customs duty exemption on raw materials (bulk drugs) used for the manufacture of such drugs.

"The manufacturers and traders are collectively resisting and lobbying against the attempts of my ministry to bring down the prices. We are not getting adequate support from the media," he said, when pointed out that his efforts to bring down the prices of life-savings medicines have not yielded much results in the past three years.

"The pricing issue is also part of the pharmaceutical policy, which is now before a group of ministers," he said.

Immediately after the Budget, Paswan had said the sops annouced for the pharmaceutical industry could help the manufacturers reduce drug prices by about 5 per cent.

Although 30 per cent of the Rs 40,000-crore domestic medicine market is dominated by "price controlled" or "scheduled" medicines, today's price cut will affect only those medicines that are manufactured in the excise payable areas of the country.

"The reduction in prices of such scheduled packs shall, however, not apply on those categories of scheduled formulation packs where no excise duty has been actually paid to the government.

Therefore, no excise duty shall be chargeable in the MRP of these scheduled formulation packs," NPPA notification has clarified.

About 80 per cent of the medicines sold in the domestic market are sourced from tax-exempt zones like Baddi in Himachal Pradesh.