Lok Sabha Question No. 33 (STARRED), answered on 2020-02-04
Subject: Pricing of Drugs
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Khagen Murmu

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

LOK SABHA STARRED QUESTION NO. †*33

TO BE ANSWERED ON 4 th  February, 2020

## Pricing of Drugs

## †*33.  SHRI KHAGEN MURMU:

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

- (a)  whether  the National Pharmaceutical  Pricing Authority has  formulated or proposes  to  formulate  any  plan  for  reducing  the  prices  of  drugs  thereby  ensuring availability  of  medicines  at  affordable  prices,  especially  for  the  poor  people  of  the country;
- (b)  if  so,  the  time  by  which  the  said  scheme  is  likely  to  be  implemented  and  the extent to which people are likely to be benefited; and
- (c) if not, the reasons therefor?

## ANSWER

## MINISTER IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI D. V. SADANANDA GOWDA)

- (a) to (c): A statement is laid on the Table of the House.

## Statement  referred  to  in  reply  to  Lok  Sabha  Starred  Question  No.  †*33  for answer on 04/02/2020 regarding Pricing of Drugs.

(a) to (c): The Pharmaceutical Policy announced by the Government from time to time  envisages  making  available  quality  medicines  at  reasonable  prices  to  the masses.  National  Pharmaceuticals  Pricing  Policy,  2012  (NPPP-2012)  was  notified with the objective to put in place a regulatory framework for pricing of drugs so as to ensure availability of required medicines - 'essential medicines' at reasonable prices even while providing sufficient opportunity for innovation and competition to support the growth of pharma industry thereby meeting the goals of employment and shared economic well-being for all.

Pursuant  to  the  announcement  of  National  Pharmaceuticals  Pricing  Policy, 2012,  Government  notified  Drugs  (Prices  Control)  Order,  2013  (DPCO,  2013)  on 15th  May,  2013.  All  the  medicines  specified  in  the  National  List  of  Essential Medicines, 2011 (NLEM) were included in the First Schedule of DPCO, 2013 and brought under price control.

Under  DPCO,  2013,  prices  of  drugs  are  fixed  on  'Market  based  pricing' methodology. 'Market based pricing' methodology has been adopted in accordance with the principles outlined in the NPPP, 2012.

NLEM  2015  contains  949  scheduled  drug  formulations  spread  across  31 therapeutic groups. National Pharmaceutical Pricing Authority (NPPA) has fixed the ceiling  prices  of  860 formulations under DPCO, 2013 as on 31 st December, 2019. NPPA also capped the maximum retail price of 106 formulations (anti-diabetic and cardiovascular under para 19 of DPCO, 2013 in July, 2014.

The prices are notified through Gazette Notifications which are also uploaded on  NPPA's  website  at  www.nppaindia.nic.in.  The  ceiling  prices  become  operative and legally enforceable from the date on which the price is notified in the Gazette.

## Statement showing range of reduction in ceiling price of scheduled formulation with respect to the highest price on the basis of data furnished by pharmatrac / pharmaceutical companies.

| %reduction with respect to Maximum Price   |   No. of formulations |
|--------------------------------------------|-----------------------|
| 0<= 5%*                                    |                   236 |
| 5<=10%                                     |                   138 |
| 10<=15%                                    |                    98 |
| 15<=20%                                    |                   100 |
| 20<=25%                                    |                    92 |
| 25<=30%                                    |                    65 |
| 30<=35%                                    |                    46 |
| 35<=40%                                    |                    26 |
| Above 40%                                  |                    59 |
| Total formulations in NLEM 2015            |                   860 |

NPPA vide order SO 1041(E) dated 27th February, 2019 put a cap on Trade Margin  of  42  select  non-scheduled  anti-cancer  medicines  under  'Trade  Margin Rationalisation (TMR)' Approach. By this approach the MRP of 526 brands of these medicines were reduced by upto 90% resulting in approx annual savings of around Rs. 984 crore to the patients.

The  regulation  of  prices  of  medicines  under  DPCO,  2013  by  NPPA  has resulted in net savings of approximately Rs. 12447 crore to the consumers.

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