The National Pharmaceutical Pricing Authority (NPPA) has asked the Organisation of Pharmaceutical Producers of India (OPPI) and Indian Drugs Manufacturers Association (IDMA) to present their views on working out a revised conversion cost (CC) and packing charges (PC) norms before NPPA and the Cost and Accounting Wing (CAW) of the Union Finance Ministry on February 17. The joint presentation is expected to help CAW finalize the CC PC norms for fixation of drug prices soon.
The forthcoming meeting is the fallout of an interaction NPPA had with the industry associations in Mumbai last month, it is learnt. 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. Finally, it has asked the C&A Wing of the Finance Ministry to do the job. The C&A Wing had attempted to collection necessary data by calling for responses from 200 pharma companies. Unfortunately, majority of the companies didn't reply to the questionnaire queries. While the industry feels that the information is confidential and could not be revealed, the regulator is in need of the actual figures for fixing the prices of drugs.
In the absence of a revised drug pricing norm, the NPPA has twice in the past, re-notified 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 assured the industry on the confidentiality of the data that would be supplied to them.