National Pharmaceutical Pricing Authority

Table of Contents

National Pharmaceutical Pricing Authority (NPPA):

NPPA ( National Pharmaceutical Pricing Authority ) is a regulatory body under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
It is responsible for fixing the ceiling price of scheduled medicines as per provisions of the Drugs (Prices Control) Order, 2013.
NPPA ( National Pharmaceutical Pricing Authority ) is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.
It also monitors the prices of decontrolled drugs to keep them at reasonable levels.
Drug (Prices Control) Order, 2013:
- It is issued by the Government of India under Section 3 of Essential Commodities Act, 1955.
- The order is issued to ensure the availability of essential medicines at affordable prices across the country.
Functions:
To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
Dealing with all legal matters arising out of the decisions of the Authority
Monitoring the availability of drugs, identify shortages, if any, and to take remedial steps
Collecting/ maintaining data on production, exports and imports, market share of individual companies, profitability of companies etc., for bulk drugs and formulations.
Undertaking and/ or sponsoring relevant studies in respect of pricing of drugs/ pharmaceuticals
Recruiting/ appointing the officers and other staff members of the Authority, according to rules and procedures laid down by the Government
Providing advice to the Central Government on changes/ revisions in the drug policy
Providing assistance to the Central Government in the parliamentary matters relating to the drug pricing

Essential Medicines:

These are a group of drugs/medicines that satisfy the priority health care needs of the population.
The WHO introduced the concept of essential medicines in 1977.
Such medicines are intended to be available in adequate amounts, in appropriate dosage forms and strengths with assured quality.
They should be available in such a way that an individual or community can afford.

Pricing Mechanism of Scheduled Drugs Under NPPA

The NPPA (National Pharmaceutical Pricing Authority) allows change in prices of scheduled drugs based on Wholesale Price Index. Drugs/medicines under National List of Essential Medicines (NLEM) are regulated.
The Ministry of Health and Family Welfare released the first National List of Essential Medicines of India in 1996 consisting of 279 medicines. Currently the list contains 851 medicines.
Determining ceiling price: The ceiling price of all scheduled drugs is calculated by first working out the simple average of price to retailer in respect of all branded and generic versions of that drug formulation having a market share of more than or equal to 1%.
An additional retailer margin of 16% to it and the ceiling price revised by the National Pharmaceutical Pricing Authority is notified.
Conditions for revising: Prices are revised when there is rise in the price of bulk drugs, raw materials, cost of transport, utilities like fuel, power, diesel, and changes in taxes and duties.
The cost of imported medicines rises with escalation in insurance and freight prices, and depreciation of the rupee.

Recent Initiatives launched on NPPA’s Silver Jubilee

Integrated Pharmaceutical Database Management System 2.0 (IPDMS 2.0): An integrated responsive cloud-based application, Integrated Pharmaceutical Database Management System 2.0 (IPDMS 2.0), developed by NPPA will be launched.
It will have technical Support from Centre for Advance Computing (C-DAC).
IPDMS 2.0 will provide a single window for submissions of various forms as mandated under Drug Price Control Order (DPCO), 2013.
It will ensure paperless functioning of NPPA (National Pharmaceutical Pricing Authority) and facilitate the stakeholders to connect with National Pharma Pricing Regulator from across the country.
It is envisaged to optimise synergies in operations in order to promote the government’s thrust on ‘Ease of Doing Business’.
Pharma Sahi Daam 2.0 App: It will have updated features like speech recognition, availability in Hindi and English, share button and medicine bookmarking.
Searching medicines brand/formulation wise
A facility for launching complaints by consumers through the consumer complaint-handling module.