Lok Sabha Question No. 5893 (UNSTARRED), answered on 2018-04-03
Subject: Price Fixation by NPPA
Ministry: CHEMICALS AND FERTILIZERS
Asked by: SANJAY SHAMRAO DHOTRE, BHARTRUHARI MAHTAB, RAHUL RAMESH SHEWALE

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA UNSTARRED QUESTION NO. 5893 TO BE ANSWERED ON 03 rd  April, 2018

## Price Fixation by NPPA

5893.  SHRI SANJAY DHOTRE: SHRI BHARTRUHARI MAHTAB: SHRI RAHUL SHEWALE:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the criteria/guidelines laid down by the National Pharmaceutical Pricing Authority (NPPA) in determining and fixing the prices of essential/life saving medicines;
- (b) whether cases of deviation from the said criteria/guidelines in fixing the prices of essential/life saving medicines by the drug manufacturing companies have come to  the  notice  of  the  Government  during  each  of  the  last  three  years  and  the current year;
- (c) if  so, the details thereof, company-wise and the reasons therefor along with the action taken/being taken by the Government in such cases so far;
- (d) whether the Government has conducted any study to ascertain updating of price list of medicines by drug manufacturing companies on their respective website;
- (e) if so, the details and outcome thereof and if not, the reasons therefor; and
- (f) the  other  steps  taken/being  taken  by  the  Government  to  bring  transparency  in fixing prices of essential/life saving medicines across the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS; MINISTRY  OF  SHIPPING  AND  MINISTRY  OF  CHEMICALS  AND  FERTILIZERS (SHRI MANSUKH L. MANDAVIYA)

- (a): National Pharmaceutical Pricing Authority (NPPA) fixes the prices of Scheduled medicines and new drugs as per the provisions of Drugs (Prices Control) Order, 2013 (DPCO, 2013).
- (b) & (c): NPPA also monitors the prices of medicines fixed by the manufacturers and  issues  notices  for  the  violation  of  the  prices.  NPPA  initiates  action  against manufacturing  companies  which  have  overcharged  patients.  The  details  of  demand notices issued in the last three years are as follows:

| Year    |   Number of cases |   Demanded Amount (Figure in Crores) |
|---------|-------------------|--------------------------------------|
| 2014-15 |               129 |                               581.08 |
| 2015-16 |               264 |                               931.18 |
| 2016-17 |               138 |                               334    |
| 2017-18 |               217 |                               704.48 |

The  detailed  list  of  overcharging  cases  where  demand  notices  have  been  issued  is available on NPPA's website www.nppa.nic.in.

(d) & (e): NPPA also verifies the prices of medicines randomly from the respective websites  of  the  drug  manufacturing  companies  and  wherever  any  violation  is  found, action is taken as per the provisions of DPCO, 2013. This is an ongoing process.

(f): In order to have transparency, a draft version of the Price Calculation Sheets for the  proposed  revised  price  notifications,  including  wherever  applicable,  the  Price  to Retailer (PTR) and Moving Annual Turnover (MAT) values adopted for calculations, is uploaded on the website of NPPA for 10 clear working days to invite comments from the affected  pharmaceutical  firms.  Only  after  taking  into  account  the  comments  or  any additional data thus received within the given time period, the NPPA finalizes the ceiling and the retail Prices. Thus the entire procedure of price fixation is available in the public domain which ensures transparency and accountability of the whole process.

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