The new Drug Price Control Order (DPCO) that will bring down drastically the prices of 348 essential medicines as per the new pharmaceutical policy has come into effect from May 15, according to a notification by the Department of Pharmaceuticals.

 Promulgated under the Essential Commodities Act, 1955, the new DPCO replaces the 1995 Order and lays down the framework of the drug policy approved by the Cabinet in November 2012 and notified by the Government later in December 2012. The new DPCO puts the mechanism for regulating the prices of 348 drugs, instead of 74 drugs in the earlier order.

As per the new drugs policy, all strengths and dosages specified in the National List of Essential Medicines (NLEM) 2011 will be under price control. According to the approved policy, prices of medicines will now be capped by taking simple average of all brands which have more than one per cent market share instead of input costs.

The National Pharmaceuticals Pricing Authority (NPPA) will be the implementation authority for the new policy and the new DPCO.

“The prices of scheduled formulations, which are also specified in the First Schedule to the Drugs (Prices Control) Order, 1995, fixed and notified under the provisions of the said order, up to 31st May, 2012, shall remain effective for further one year i.e. up to 30th May’ 2013 and the manufacturers may revise the prices of such scheduled formulations as per the annual wholesale price index for the previous calendar year announced by Department of Industrial Promotion and Policy and thereafter the formula as in sub- paragraph (1) of paragraph 4 of this Order shall be applied for fixing the ceiling prices of such formulations,” the order says.

“The Government may, - (i) with a view to achieve adequate availability and to regulate the distribution of drugs, in case of emergency or in circumstances of urgency or in case of non-commercial use in public interest, direct any manufacturer of any active pharmaceutical ingredient or bulk drug or formulation to increase the production and to sell such active pharmaceutical ingredient or bulk drug to such other manufacturer(s) of formulations and to direct formulators to sell the formulations to institutions, hospitals or any agency as the case may be;  (ii) for the purpose of giving any direction under sub-paragraph (i), call for such information from manufacturers of active pharmaceutical ingredients or bulk drugs or formulations, as it may consider necessary and such manufacturer shall furnish the required information within such time the Government may fix,” it says while giving detailed formula for fixing the prices.