The leading Indian pharmaceutical industry associations have recently urged the Department of Pharmaceuticals (DoP) to introduce prospective batch pricing for scheduled drugs whenever ceiling prices are reduced. The proposal seeks amendments to key provisions of the Drug Prices Control Order (DPCO), 2013, including Para 13, 16 and 24, so that revised ceiling prices are implemented only on batches manufactured after the notification date. The industry argues that the current system, under which revised ceiling prices take immediate effect upon notification, creates significant operational and compliance challenges across the pharmaceutical supply chain. With over twelve lakh pharmacies spread across the country, instant implementation often leads to pricing discrepancies, logistical complications and potential disputes related to alleged overcharging at the retail level. To address these concerns, the industry has recommended that price revisions be applied prospectively, allowing manufacturers to implement changes on future production batches rather than on stocks already manufactured and distributed. Industry is of the view that this approach will provide greater clarity, reduce compliance burdens and ensure smoother transition to revised pricing structures. At present, once ceiling prices are notified by the national drug price regulator, the National Pharmaceutical Pricing Authority (NPPA), the revised ceiling price is mandatorily made applicable with immediate effect, putting the pharmaceutical companies in real quandary. This sudden implementation poses considerable challenges for the pharmaceutical companies, particularly in ensuring that more than twelve lakh pharmacies across the country promptly adjust their pricing structures. Overnight ceiling price implementation is well nigh impossible as the pharma companies will not be able to take the onus of informing and coordinating with more than 12 lakh chemists and druggists spread across the nook and corner of this vast country. It is beyond the scope and reach of any company.
The industry’s demand in this regard looks genuine. At the most, the pharma companies can enable the price change till Carrying and Forwarding (C&F) Agents, depots and stockists, but these companies have no control over 12 lakh chemists in the country leading to litigations even if one strip is found with the old rate with the chemist after 3 to 4 months. The industry associations have been raising the concern that even if a single retailer in the country is found with one unit of formulation with a price higher than the newly notified ceiling price, then the pharma companies are held responsible and are subsequently issued overcharging notices by the drug price regulator, leading to show cause notices and legal cases. Under this background, the pricing changes should be applied to future batches, and the NPPA should allow the companies timely adjustments through the Integrated Pharmaceutical Database Management System (IPDMS 2.0), which was introduced by the NPPA to streamline operations by centralizing submissions required under the DPCO-2013. It will ensure accurate and timely price revisions across scheduled and non-scheduled formulations and active pharmaceutical ingredients. Pricing adjustments should apply to future batches of pharmaceutical products to facilitate smoother compliance with DPCO guidelines by allowing manufacturers to implement changes gradually through the IPDMS 2.0 which serves as a centralized platform for the submission of pricing information and other regulatory requirements mandated by the DPCO-2013. To resolve this long pending issue, the NPPA should allow prospective batch pricing so that the notified ceiling price is effective from the next manufactured batch and is not applicable on market stocks manufactured prior to the notification. |