The current ceiling limit of 10 per cent on the yearly permissible hike of prices of non-scheduled drugs may be revised to 15 per cent, if the proposed National Pharmaceutical Pricing Policy gets through.
The revision of ceiling limit, which had been sought by the industry for long, was included by the Department of Pharmaceuticals (DoP) in the new draft of the policy released recently.
Under the present price control regime, the prices of non-scheduled drugs are monitored, and in case the prices of such drugs increase by more than 10 percent in a year, the National Pharmaceutical Pricing Authority (NPPA) is empowered to fix the price of such drugs. The criteria for the same were that the turnover of that particular formulation pack is more than <span class=WebRupee>Rs.</span>1.00 crore, the product is one of the top three brands or the formulator has 20 per cent market share in that segment of formulation.
“In the proposed policy, all essential drugs are under price control. It would follow that non-essential drugs should not be under a controlled regime and their prices should be fixed by market forces. However, in order to keep a check on overall drug prices, it is proposed that prices of such drugs be monitored on regular basis, and where such prices increase at a rate of 15 per cent per annum or the increase in the WPI, whichever is higher, and certain conditions regarding turnover and market share, to be determined subsequently, are met, the NPPA would be empowered to have the price of these drugs reduced to below these limits for 12 months,” the draft policy says.
The NPPA had revised the guidelines for monitoring of prices of non-scheduled formulations, making the 10 per cent ceiling in prices effective from April 1, 2007. Though the guidelines were issued first to be made effective from January 1, 2007, later it gave three more months to the industry. Till then, the permitted ceiling limit was 20 per cent annually and the manufacturers and associations have been demanding to restore 20 per cent ceiling on the grounds of increased prices of raw materials, inflation and shortage of ingredients.
Ever since the industry has been crying foul and calling for revision of the guidelines to restore the 20 percent ceiling limit which the DoP was not favouring at all.