The National Pharmaceutical Pricing Authority (NPPA) has notified a revision in the norms for fixing the packaging material cost of drugs. This is in tune with the changes effected in the norms for calculating the process loss of packaging material early this month. As per the revision, the allowance for packaging cost is to go down moderately.
According to a NPPA statement, these norms have been revised mainly on account of the changes effected in the Process Loss of Packing Material notified vide S.O. 913(E) dated 11.08.04.
It was in May, the NPPA first notified specific norms for packing material cost. PM cost is an important factor along with process loss (PL), conversion cost (CC) and packing charges (PC) in fixing the price of drugs that come under the Drug Price Control Order (DPCO), 1995.
PMC constitutes around 5-8 per cent of the cost of finished product. A mark up of another equivalent percent (5-8) is also allowed, which means that PMC can be in the range of 10-18 per cent of the final product's price. The changes will come into force with immediate effect.