The National Pharmaceutical Pricing Authority (NPPA) has asked all manufacturers and marketing companies to cut the prices of all non-scheduled formulation packs by 4.58 per cent, following the reduction in excise duty on all pharmaceutical products from 16 per cent to 8 per cent in the general budget.

The NPPA, in a release on Monday, made the cut in prices effective immediately and said it would invoke the 10 per cent ceiling limit with effect from March 1 when the new duty tariffs came into force.

"Consequent upon the reduction in the rate of excise duty on medicines from 16 per cent to 8 per cent notified by the Ministry of Finance, Department of Revenue vide Notification No.4/2008 Central (Excise) dated on 01.03.2008 and the rate of abatement from 42.5 per cent to 35.5 per cent vide Notification No.14/2008-Central Excise (N.T.) dated 01.03.2008, all manufacturers and marketing companies of formulation packs are advised to ensure that the benefit of this excise duty reduction and the reduced rate of abatement is passed on to consumers through reduced Maximum Retail Price (MRP),'' the release said.

Prices of all non scheduled packs must accordingly be reduced downwards by 4.58 per cent except in those categories of non scheduled formulation packs where no excise duty has been actually paid to the Government and therefore no excise duty shall be chargeable in the MRP of such non scheduled packs. The National Pharmaceutical Pricing Authority (NPPA) expects that the above reduction in MRP would be complied with by way of reduced MRP and that necessary revised price lists would be submitted to NPPA forthwith, the NPPA said.

``NPPA shall accordingly monitor the limit of 10 per cent increase in prices per annum of non scheduled packs based on the reduced MRP for all such packs where the batch of the formulation pack has been cleared by the manufacturer through the competent excise authorities on or after March 1, 2008 in terms of above mentioned notifications of the Ministry of Finance (Department of Revenue) both dated 01.03.2008," it added.