Cabinet approves Pharmaceuticals Purchase Policy for PSUs

The Union Cabinet on 30 October approved the Pharmaceuticals Purchase Policy (PPP), for a period of five years. The renewal of the PPP aims at ensuring optimum utilisation of the installed capacity of the pharmaceutical Central Public Sector Enterprises (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 besides ensuring drug security of the nation.
 
Pharmaceuticals Purchase Policy, in respect of 103 medicines, would be valid for a period of five years from the date of issue of orders by Department of Pharmaceuticals. The policy will extend only to CPSEs under the administrative control of Department of Pharmaceuticals such as Indian Drugs and Pharmaceuticals Limited (IDPL), Hindustan Antibiotics Limited (HAL), Bengal Chemicals and Pharmaceuticals Limited (BCPL), Karnataka Antibiotics and Pharmaceuticals Limited (KAPL) and Rajasthan Drugs and Pharmaceuticals Limited (RDPL) and their subsidiaries where Government of India owns 51% or above shares.
 
This would be applicable to purchases by Central Government departments, their Public Sector Undertakings, and Autonomous Bodies, etc. This would also be applicable to purchase of medicines by State Governments under Health Programmes funded by Government of India such as the National Rural Health Mission etc. As per Pharmaceuticals Purchase Policy, the pricing of the products would be done by National Pharmaceutical Pricing Authority (NPPA) using the cost based formula, as mentioned in the Drugs Price Control Order, 95. A uniform discount of 16% would be extended to all products. All the taxes, whatsoever, would have to be passed on to buyers.
 
The procuring entity would purchase from pharma CPSEs and their subsidiaries subject to their meeting Good Manufacturing Practices (GMP) norms as per Schedule 'M' of the Drugs & Cosmetic Rules. In case pharma CPSEs and their subsidiaries fail to supply the medicines, the 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.