Drug Price Regulation

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