NPPA may get full pricing freedom

The government has hinted that medicine price regulator National Pharmaceutical Pricing Authority (NPPA) will be given a free hand to control prices of medicines, including those normally out of the price-control mechanism.

Union Chemicals and Fertilisers Minister Ram Vilas Paswan told Business Standard his ministry "will not interfere in the efforts of NPPA on this front".

Paswan's remarks come in the backdrop of the NPPA's recent move to invoke a public interest clause "" Para 10 (B) of the Drugs Price Control Order (DPCO), 1995 "" to fix prices of the medicines that are not under price control.

Speaking on the sidelines of a press meet at Rashtriya Chemicals and Fertilisers (RCF) in Mumbai yesterday, Paswan said the proposed pharmaceutical policy, in circulation for the last two years, was before the empowered group of ministers (eGoM) headed by Sharad Pawar and needed the approval of the Cabinet.

"Our recommendation for fixing a trade margin of 15 per cent for wholesalers and 35 per cent for retailers is yet to be implemented. It is not in my hands now and we hope to have the approval soon," he added.

The NPPA has until now brought 23 non-scheduled medicines under price control by invoking Para 10 (B) of the DPCO.

Citing the clause a few months ago, the regulator had asked 11 drug manufacturers such as Cadila Pharmaceuticals, Deepti Care Health, Dr. Reddy's Laboratories, GlaxoSmithKline, Lupin Labs, Mepro Pharmaceuticals, Ranbaxy, UCB India, Wallace Laboratories and Yash Pharma to explain price hikes of more than 20 per cent for 11 non-scheduled drugs during the one-year period in 2004-05.

The DPCO provisions allow the NPPA to fix prices of 74 formulations, mostly bulk drugs. The proposed pharmaceutical policy envisages bringing 354 essential drugs under price control.

There was also a reported move to amend the DPCO to cap the trade margin for control-free drugs at 10 per cent of the MRP (excluding excise duty and other levies) for wholesalers and 20 per cent for retailers.