The Union Chemicals inistry has turned down the request of the pharmaceutical industry to be more `predictable’ in the way the National Pharmaceutical Pricing Authority (NPPA) imposes price control on the brands that are normally outside the government’s direct price control.
One of the key suggestions of the industry is to consider price fluctuations either in calendar year or financial year, instead of the current practice of assessing it each month. However, the authorities have clarified that such a step would be irrelevant as per the current system.
“The prices of non-scheduled formulations are monitored by the NPPA regularly. As per the prescribed criteria, companies are shortlisted by NPPA where there is an increase in price of a non-scheduled formulation by more than 10 per cent in one year and the annual turnover of the formulation pack exceeds Rs 1 crore. Further, the share of the formulator in that segment of the formulation is required to be at least 20 per cent of the market or the medicine is one of the first three top brands of that group,” sources said.
The criteria, namely, high turnover and 10 per cent increase are designed to identify cases of mass consumption and to meet the requirement of `public interest’, referred to in Para 10(b) of the DPCO, 1995. “Wherever any abnormal price increase is noticed, necessary action is taken. This is an ongoing process. The price fluctuations need to be assessed each month for this purpose considering the preceding 12 month period and hence calendar year or financial year would not be relevant for monitoring the changes in prices and further action thereon,” sources added.
It is learnt that many drug companies in the recent past had taken up the matter of calculating the price increase, though no specific representation came from any major association as such. And the general demand from the companies is that the NPPA should be `more predictable’ as the non-scheduled formulations accounted for nearly four-fifth of the total drugs market in the country.