Lok Sabha Question No. 1161 (UNSTARRED), answered on 2018-12-18
Subject: Pricing of Essential Medicines
Ministry: CHEMICALS AND FERTILIZERS
Asked by: SUSHIL KUMAR SINGH

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

LOK SABHA UNSTARRED QUESTION NO. 1161 TO BE ANSWERED ON 18 th  December, 2018

## Pricing of Essential Medicines

1161.  SHRI SUSHIL KUMAR SINGH:

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

- (a) the details of the methodology adopted to fix the price of essential medicines;
- (b) the  likely  impact  on  the  prices  of  essential  medicines  due  to  the  new  drug policy;
- (c) the  steps  taken/being  taken  by  the  Government  to  ensure  that  doctors  in private  clinic  are  prescribing  medicines  from  the  National  List  of  Essential medicines;
- (d) whether the  Government has  taken  steps  to  implement  the  Supreme  Court directive to stick to cost-based pricing formula; and
- (e) if so, the details thereof and if not, the reasons therefor?

## 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): Under the Drugs (Prices Control) Order, 2013 (DPCO, 2013), ceiling price of scheduled  medicines is fixed based on the market based data, inter alia , by taking simple average price to retailer(PTR) of all those manufacturers who have market share  more  than  or  equal  to  1%  of  total  market  turnover  on  the  basis  of  Moving Annual  Turnover  (MAT)  of  a  specified  medicine.  The  ceiling  price  is  derived  by adding 16% margin on the simple average price to the retailer (PTR) for the specified medicine. As provided for under the Order, the local taxes if actually paid, wherever applicable  on  actual  basis,  will  be  added  with  the  ceiling  price  to  arrive  at  the Maximum Retail Price to the consumers.
- (b): The government has fixed the ceiling prices of the 856 scheduled formulations upto 30.11.2018 resulting in the reduction in the prices as follows:

| Statement showing reduction in ceiling prices of scheduled formulations with respect to maximum price under NELM 2015 as on 30.11.2018   | Statement showing reduction in ceiling prices of scheduled formulations with respect to maximum price under NELM 2015 as on 30.11.2018   |
|------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
| %reduction with respect to Maximum Price                                                                                                 | No. of scheduled formulations                                                                                                            |
| 0<= 5%                                                                                                                                   | 237                                                                                                                                      |
| 5<=10%                                                                                                                                   | 135                                                                                                                                      |
| 10<=15%                                                                                                                                  | 98                                                                                                                                       |
| 15<=20%                                                                                                                                  | 99                                                                                                                                       |
| 20<=25%                                                                                                                                  | 93                                                                                                                                       |
| 25<=30%                                                                                                                                  | 65                                                                                                                                       |

| 30<=35%                         |   46 |
|---------------------------------|------|
| 35<=40%                         |   24 |
| Above 40%                       |   59 |
| Total formulations in NLEM 2015 |  856 |

(c): The National List of Essential Medicines (NLEM) is a list of essential drugs prepared by the Ministry of Health and Family Welfare.  There is no such case as doctors  not  prescribing  medicine  from  NLEM  as  essential  medicines  are  those medicines that satisfy the priority healthcare needs of the population.

(d) & (e): There  is  no  such  direction  of  the  Hon'ble  Supreme  Court  to  stick  to Cost based pricing formula.

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