Lok Sabha Question No. 364 (UNSTARRED), answered on 2016-04-26
Subject: National Pharmaceutical Pricing Authority
Ministry: CHEMICALS AND FERTILIZERS
Asked by: BHARTRUHARI MAHTAB

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

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## LOK SABHA

## UNSTARRED QUESTION NO.364

## TO BE ANSWERED ON 26 th  APRIL, 2016

## National Pharmaceutical Pricing Authority

## 364. SHRI BHARTRUHARI MAHTAB:

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

- (a) the criteria/guidelines  laid  down  by the  National Pharmaceutical  Pricing Authority (NPPA) for determining and fixing prices of essential/ life saving medicines;
- (b) whether  the  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  alongwith  the  action taken/being taken by the Government in such cases so far;
- (d) whether all the drug manufacturing companies have updated their price list of medicines on  their  respective  website,  if  so,  the  details  thereof  and  if  not,  the  reasons  therefor alongwith the time by which it is likely to be done by the said companies; and
- (d) the  other  steps  taken/being  taken  by  the  Government  to  bring  transparency  in  fixing prices  of  essential/life  saving  medicines  and  to  curb  deviation  from  the  standard criteria/guidelines in fixing prices of such medicines?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS (SHRI HANSRAJ GANGARAM AHIR)

(a): Department  of  Pharmaceuticals  (DOP)  notified  Drug  (Price  Control)  Order  (DPCO), 2013 on 15 May, 2013. The ceiling price of scheduled medicines (NLEM medicines) are fixed by National Pharmaceutical Pricing Authority (NPPA) on the market-based methodology as per para  4  &  6  of  DPCO,  2013.  The  companies  are  not  allowed  to  increase  the  price  beyond wholesale price  index  in  a  year  as  per  para  16  of  DPCO,  2013.  In  respect  of  non-  scheduled medicines, the companies are not allowed to increase the MRP of medicines beyond 10% of the MRP of preceding 12 months as per para 20 of DPCO, 2013.

- (b) & (c): Yes,  Madam.    Whenever  companies  are  found  overcharging  the  consumer  in respect  of  prices  of  medicines,  NPPA  issues  demand  Notices  for  recovery  of  overcharged amount alongwith interest thereon, under various provisions of DPCO, 1995 and DPCO, 2013 read with Section 7A of Essential Commodities Act, 1955. The details of overcharging cases of 2015-2016 are given below:

2015-16

| No. of Companies   | No. of Companies   | No. of Companies   | Demand Notice issued (Rs. in crore)   | Demand Notice issued (Rs. in crore)   | Demand Notice issued (Rs. in crore)   | Recovery effected (Rs. in crore)   | Recovery effected (Rs. in crore)   | Recovery effected (Rs. in crore)   |
|--------------------|--------------------|--------------------|---------------------------------------|---------------------------------------|---------------------------------------|------------------------------------|------------------------------------|------------------------------------|
| DPCO, 1995         | DPCO, 2013         | Total              | DPCO, 1995                            | DPCO, 2013                            | Total                                 | DPCO, 1995                         | DPCO, 2013                         | Total                              |
| 159                | 104                | 263                | 907.84                                | 20.48                                 | 928.32                                | 7.96                               | 4.72                               | 12.68                              |

The  year-wise  list  of  these  overcharging  cases  (updated  upto  31.03.2016)  has  been uploaded on the website of NPPA i.e. www.nppaindia.nic.in.

- (d): DPCO,  2013  does  not  have  any  enabling  provision  to  monitor  the  companies  having updated the price-lists on their website.  However, companies are mandated to update prices on Form-V  (as  provided  in  Schedule-II  of  DPCO,  2013)  on  Pharma  Data  Bank  (PDB)  -  an integrated  Pharmaceutical  Database  Management  System  (IPDMS).    This  information  is monitored by NPPA.
- (e): The working sheet in respect of ceiling price fixation of scheduled medicines and minutes of Authority Meetings of NPPA are uploaded on the website of the NPPA. Guidelines for price fixation are also uploaded on NPPA website.

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