The Indian Drug Manufacturers' Association (IDMA) has urged the department of pharmaceuticals (DoP) and National Pharmaceutical Pricing Authority (NPPA) to clarify the reduction in maximum retail prices (MRP) of schedule formulations linked to reduction in wholesale price index (WPI) for the year 2015 as the association believes it is unfair to ask the manufacturers to reduce the ceiling price whose product MRP is already below the ceiling price.

Recently, the NPPA has come up with a notification asking all the manufacturers of scheduled formulations having MRP lower than the ceiling price, including local taxes, to further reduce the maximum retail prices at 2.7105 per cent.

As per the annual change in the WPI by minus 2.7105 per cent during the year 2015, NPPA has notified on March 2, 2016 that all manufacturers of scheduled formulations having MRP lower than the ceiling price as notified including local taxes, if any, shall make corresponding reduction in the maximum retail prices as per the provisions of paragraph 16(4) of Drugs (Prices Control) Order, 2013.

According to IDMA, the said direction is contrary to the letter and spirit of the DPCO, 2013 read with NPP-2012. The association states that paragraph 16(4) of the said order does not mention about the formulations that are priced lower than ceiling price voluntarily or even otherwise. Therefore the notification is a contradiction and is unnecessarily inserted.

Para 16(4) DPCO, 2013 states that 'in case of scheduled formulations produced or available in the market before the date of notification of revised ceiling price, the manufacturers shall ensure within a period of forty-five days of the date of such notification that the maximum retail price of such scheduled formulation does not exceed the revised ceiling price (plus local taxes as appicable).'

S V Veerramani, president, IDMA, says “We have asked the NPPA and DoP to clarify whether NPPA is justified in directing manufacturers to reduce their prices corresponding to reduction in price of WPI for the year 2015 even when their prices were lower than the notified ceiling prices.”

“It is acceptable that those formulations which are following the ceiling price or are above the ceiling are directed to reduce the price in line with WPI but it is unfair to the manufacturers whose product prices are already less than the ceiling even they are asked to reduce the price further, it should not be mandatory,” Veerramani said.