New Delhi: The National Pharmaceutical Pricing Authority (NPPA) has decided to use the price database from October 2023 for fixation of ceiling prices of around 225 formulations for which it has to fix ceiling price under the revised Schedule I of the Drugs (Prices Control) Order (DPCO), 2013. The ceiling prices under the revised Schedule had been fixed till the second half of January, 2024, using the July, 2022 database.
The Authority has released a fresh group of draft calculation sheets of ceiling prices for 35 formulations with price revision suggested based on the database from October, 2023.
NPPA, in a recent meeting, observed that based on the decision in a meeting held on November 23, 2022, till January 24, 2024, it has fixed ceiling prices of 700 formulations under the National List of Essential Medicines (NLEM), 2022 using the July, 2022 database. Further, ceiling prices of around 225 formulations are to be fixed now.
Drawing a comparison to the previous ceiling price revision exercise based on the NLEM, 2015, the Authority noted that the NLEM was notified as Schedule I in March, 2016 and the database of August 2015, which is six months prior to date of notification of the Schedule I, was considered while fixing the prices. However, after promulgation of Para 9(7) with effect from January 3, 2019, ceiling prices were fixed under NLEM, 2015 considering the database of the month of August 2015 as well as other months.
It also observed that the October 2023 database used for price fixation would capture the Price To Retailer (PTR) duly revised based on the Wholesale Price Index (WPI) for 2023 as availed by the companies.
“Accordingly, it was decided to use October 2023 database and the month of October, 2023 for fixation of ceiling prices of remaining formulations under NLEM, 2022 under Para 9(7) of DPCO, 2013,” added the Authority after the meeting.
The Para 9(7) of the DPCO, 2013, which was added to the Order through an amendment in January 3, 2019, states that notwithstanding anything contained in this paragraph, for fixing or revising the ceiling price for formulations, the Government may, if it is necessary so to do, consider market based data available for any month, as deemed fit.
The Authority has so far been fixing the ceiling prices under the revised Schedule I of the DPCO, which was amended last year replacing the National List of Essential Medicines (NLEM), 2015 with the NLEM, 2022, and notified by the Department of Pharmaceuticals (DoP) on November 11, 2022.
When the NPPA announced its methodology for the revision of prices based on the revised Schedule I, in November, 2022, it decided that data for July, 2022 and Pharmatrac database of July, 2022 shall be considered for fixation of ceiling prices under the latest NLEM.
The Authority, in its meeting held on December 15, considered the proposal for fixation of ceiling prices for the remaining formulations based on data available in the market database for the month of October, 2023 and decided that the matter may be examined further and placed in the next Authority meeting. The decision confirming the change in month of database was taken in a meeting held on January 24, 2024.
It may be noted that the scheduled formulations for which the ceiling prices were already fixed before the beginning of the current fiscal year underwent a correction following the implementation of revision of prices based on the Wholesale Price Index (WPI) of 12.1218 from April 1, 2023.
The Authority has in November, 2022 said that the ceiling price fixing and revision exercise would see new prices fixed for around 954 formulations in total, comprising 388 medicines in total, based on the database from the market research firm Pharmatrac for the month of July, 2022.
While the general practice is that the ceiling prices are fixed considering the market-based data for fixing the ceiling price of schedule formulation due to revision in the First Schedule shall be the data available for the month ending immediately before six months of notification of revision in the first schedule, the Authority used the data from July, 2022, paying heed to the representations of the industry associations.
The associations requested the Authority not to consider the data of April, 2022, which is six months prior to the date of notification of the revised Schedule 1, since it may not completely reflect the current Price to Retailer (PTR)/Maximum Retail Price (MRP) of formulations. This is considering that the ceiling prices were revised based on the Wholesale Price Index (WPI) of 10.8 percent based on the WPI notification issued on March 30, 2022 for scheduled formulations.
The industry also stated that the market-based data to be considered for ceiling price fixation should be post implementation of revised prices for products considering the potential time lag for implementation with regard to imported formulations. They requested the NPPA to consider the latest month data, which is of October or September, 2022.
There are also provisions in the amended DPCO that for fixing or revising the ceiling price for formulations, the Government may, if it is necessary to do so, consider market based data available for any month, as deemed fit.
While the total unique formulations for which ceiling prices are to be fixed through the move are around 819, in view of the expansions to the revised Schedule 1 and others, the number of formulations may increase beyond 954 formulations to around 1000 formulations, said the Authority.