The Indian Drugs Manufacturers Association (IDMA) has urged the Government to notify the revised ceiling prices of drugs at the earliest to help the drug manufacturers prepare the inventory of packing materials well in time in respect of batches to be manufactured after 2nd October 2006 to comply with the MRP inclusive of taxes regime.

In a memorandum to the Ministry of Chemicals & Fertilisers, IDMA noted that as per Clause 2(a) of Drugs (Prices Control) Amendment Order, 2006, "Maximum retail price" means the retail price arrived at or fixed in accordance with the provisions of the Order and includes a ceiling price, at which the drug may be sold to the ultimate consumer and where such price is mentioned on the pack, the words "Maximum or Max. Retail price inclusive of all taxes" shall be printed on the pack. Further, it has been explained that the words "inclusive of all taxes," in relation to any drug shall include all taxes local or otherwise including Excise Duty, Sales Taxes/Value Added Tax (VAT).

Therefore, it is necessary for the NPPA to revise and notify the existing ceiling prices "inclusive of all taxes". While fixing the revised ceiling prices as MRP inclusive of all taxes, NPPA should take into consideration in the revised ceiling prices "all taxes local, or otherwise, including Excise Duty, Sales Taxes/value added tax (VAT)" and the different levels of Sales Tax existing in different States and the different elements of Octroi, existing in several cities in India, demanded IDMA.

The association noted that ceiling prices are fixed from time to time under the Drugs (Prices Control) Order 1995 in respect of the scheduled formulations without the element of local taxes, or otherwise, since pursuant to Para 14 and 15 of the DPCO, 95 the price declaration is to be made of the 'retail price' with the expression "Local taxes extra" following it.

With the insertion of Para 2 (mm) in the DPCO, 95 and the amendments to Para 14 and 15 and in Forms II, III and V, now it is mandatory for the manufacturers to declare the existing ceiling prices as "Maximum Retail Prices Inclusive of all Taxes" on the packs of their Scheduled formulations.