Drug Price Regulation

August 31, 2023

GS Paper III Indian Economy

Context:

Recently, National Pharmaceutical Pricing Authority (NPPA) has brought 44 new drugs under price control.

About Drug Price Control

Drug (Prices Control) Order (DPCO), 2013: Prices of drugs in India are regulated as per provisions of Drugs (Prices Control) Order, 2013, by NPPA, under the aegis of Department of Pharmaceuticals (DoP).
Role of DPCO: It controls the prices of all essential medicines by fixing ceiling prices, limiting the highest prices companies can charge.
National List of Essential Medicines (NLEM) is drawn up to include essential medicines that satisfy the priority health needs of the population.
- NLEM is updated periodically by an expert panel set up under the aegis of the Ministry of Health and Family Welfare.
- It forms the basis of price controls under the DPCO.
Role of NPPA: It fixes the ceiling price of scheduled medicines.
- It also fixes retail price of ‘new drugs’ for existing manufacturers of scheduled formulations.
- For non-scheduled formulations, a manufacturer is at liberty to fix its maximum retail Ppice (MRP) but cannot increase the same by more than 10% of what was prevalent during the preceding 12 months.

News Source: Livemint

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