The National Pharmaceutical Pricing Authority (NPPA) has clarified that orthopaedic implants along with other medical devices will be treated as drugs, hence provisions of DPCO, 2013 are applicable to notified medical devices.

Refuting the contention of the medical devices manufacturers, especially the manufacturers of orthopaedic implants, that the provisions of DPCO 2013 are not applicable to medical devices, the NPPA said, “Para 20 of DPCO, 2013 provides for monitoring of non-scheduled formulations. Orthopaedic implants along with other medical devices are notified as 'drug' under Drugs & Cosmetics Act & Rules thereunder. Therefore your contention that the provisions of DPCO, 2013 are not applicable to medical devices is totally incorrect.”

It may also be noted that Para 25 of DPCO, 2013 requires every manufacturer/importer to issue a price list in Form V. Further Para 29 empowers the government to call for any record and to inspect such report at the premise of the manufacturers relating to sales of the formulations, which include 14 notified medical devices. Accordingly, it has been decided to seek the following information/documents in order to examine price violation, if any, in respect of notified medical device, manufactured/imported/marketed by the company, the NPPA further mentioned in its clarification.

Earlier in May this year, the NPPA had sought detailed information about the prices of notified orthopaedic implants from the manufacturers to initiate stringent action if they are found to be charging exorbitant prices from the consumers in violation of Drugs & Cosmetics Act. The NPPA's action was in the wake of reports in the media that the prices of orthopaedic implants regulated as 'drugs' under Drugs & Cosmetics Act & Rules thereunder, are sold at exorbitant price with high profit/trade margin.

The NPPA had then asked the manufacturers of notified orthopaedic implants to provide details like product specification with brief description/literature for different types of notified medical devices manufactured/imported by the company and other details like ex-factory price/landed cost (including applicable duties); distributor cost; maximum retail price (MRP); and percentage of increase in MRP (year to year) in the last three years.

The NPPA said that Para 20 of the DPCO, 2013 provides for monitoring the prices of non-scheduled formulations and to ensure that no manufacturer/importer/distributor is allowed to increase the MRP of a non-scheduled drug more than ten per cent of MRP during preceding twelve months and where the increase is beyond ten per cent, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months. The manufacturers/importer/distributor shall be liable to deposit the overcharged amount along with interest thereon, from the date of increase in price in addition to the penalty.