The Cost and Accounting Wing of the Union Finance Ministry that has been entrusted with the job of fixing the conversion cost (CC) and packing charges (PC) norms for National Pharmaceutical Pricing Authority (NPPA) will complete the task with the assistance of the drug industry. The C&A Wing is in the process of holding yet another interaction with the drug manufacturers to convince them of the need for the industry inputs.
The Organisation of Pharma Producers of India (OPPI) and Indian Drugs Manufacturers Association (IDMA) have agreed to jointly convene a meeting within two weeks at Mumbai for facilitating this interaction, it is learnt. The Chief Cost & Accounting Officer is to address the pharma manufacturers and seek their cooperation.
The CC&PC norms are essential for NPPA to work out a realistic price revision of drugs that comes under the Drugs Price Control Order (DPCO).
The NPPA has been attempting to understand the actual amount that is spent by the companies as CC&PC. The NPPA tried to get this work done by independent agencies, only to be opposed by the industry. As the last attempt, it has asked the C&A Wing of the Finance Ministry to do the job. The C&A Wing, as part of data collection, had posted questionnaires to about 200 pharma companies. Unfortunately, majority of the companies chose not to respond to the queries. While the industry feels that the information is confidential and could not be revealed, the regulator is badly in need of the actual figures for fixing the prices of drugs.
In the absence of a revised drug pricing norm, the NPPA has been twice in the past, re-notifying the existing norms. The norms were not based on exact production cost, but were fixed through some undisclosed database known to the agency. The CC&PC are two major cost components that go into the final prices fixed by the government.
Interestingly, the C&A Wing had always been assuring the industry on the confidentiality of the data that would be supplied to them. The forthcoming interaction will be yet another attempt in the same direction.