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Drug pricing regulator NPPA

10th August, 2023 Health

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Context: Drug pricing regulator NPPA fixes retail rates of 44 formulations; including fever, heart medicines.

More about the news

  • Drug price regulator National Pharmaceutical Pricing Authority (NPPA) fixed the retail prices of 44 new drug formulations in its 115th meeting.
  • The changes in bulk drugs and formulations, monitored prices of non-scheduled drugs and formulations, and the implementation of the provisions of the Drugs (Price Control) Order (DPCO) were also revised.
  • The formulations that received the price approval include paroxetine controlled release and clonazepam capsules manufactured by Akums Drugs and marketed by Eris Lifesciences, itraconazole capsule (Supra-bioavailable formulation) marketed by Mascot Health Series and marketed by Indchemie Health Specialities, and levetiracetam and sodium chloride infusion manufactured by Akums Drugs and marketed by Mankind Pharma Ltd.
  • Formulations in the antidiabetic segment comprising sitagliptin phosphate and metformin, blood pressure lowering combinations of telmisartan and cilnidipine tablet, and chlorthalidone, amlodipine and telmisartan tablets, and pain killer combination aceclofenac with paracetamol and serratiopeptidase tablet, among others, were also among the new drugs for which retail prices were fixed.
  • The maximum price of sugar, pain, fever, infection and heart medicine, including multi-vitamin and D3, has been fixed.

Issue of drug Linagliptin

  • Various marketing companies including Mankind Pharma, Cipla, Corona Remedies, and Primus Remedies approached the Authority prior to fixing the prices, on the methodology adopted by the NPPA related to retail price calculation of anti-diabetic combinations with linagliptin.
  • Linagliptin has been patented in India by German pharma major Boehringer Ingelheim under the brand Trajenta.
  • The company had a patent granted for the Markus formula, as a genus patent, for which the term expired on February 21, 2022.
  • Several Indian companies launched the product following the patent expiry, but the originator company claimed that the product is covered under a patent granted on October 5, 2010, for a term of 20 years with effect from August 18, 2003. Various generic players challenged this claim in the Courts in recent times.

Price fixation of the retail price of new drugs with ingredients that have become off-patent or about to become off-patent:

  • The present working of retail price fixation by applying a 50% reduction is as provided under Para 5(3)(i) of DPCO, 2013.
  • Department of Pharmaceuticals (DoP) issued a notification amending the DPCO, 2013 to include provisions by which the retail price of new drugs with ingredients that have become off-patent or about to become off-patent will be arrived at by reducing fifty per cent of the price calculated as per the provisions of the price control order.
  • A similar provision has also been notified by the DoP for the revision of the ceiling price of the scheduled formulation after the expiry of a patent issued under the Patents Act, of 1970.
  • As per the order, after one year from the date on which the retail price was fixed the Order or the date on which the price to the retailer of at least one company was fixed under the regulation is captured in the pharmaceutical market database, whichever is later, the retail price for the subsequent manufacturers shall be fixed as per sub-paragraph (1) of Paragraph 4.

The National Pharmaceutical Pricing Authority

  • The National Pharmaceutical Pricing Authority was set up as an attached office of the Department of Chemicals and Petrochemicals, which is now the Department of Pharmaceuticals, on 29th August 1997.
  • It was established, inter alia, to fix/ revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995.
  • The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for controlled drugs from consumers.
  • It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

Functions of NPPA

  1. To implement and enforce the provisions of the Drugs Price Control Order (DPCO), 1995/2013 in accordance with the powers delegated to it.
  2. To undertake and/or sponsor relevant studies in respect of the pricing of drugs/formulations.
  3. To monitor the availability of drugs, identify shortages, if any, and take remedial steps.
  4. To collect/maintain data on production, exports and imports, market share of individual companies, the profitability of companies etc. for bulk drugs and formulations.
  5. To deal with all legal matters arising out of the decisions of the Authority.
  6. To render advice to the Central Government on changes/revisions in the drug policy.
  7. To render assistance to the Central Government in parliamentary matters relating to drug pricing

Price monitoring and resource unit (PMRU)

  • Under its program called "Consumer Awareness, publicity and price monitoring (CAPPMS)" the NPPA has set up 12 Price monitoring and resource units in various States and UTs.
  • It has planned to set up such units in all 36 states and UTs for better outreach of NPPA in the states as these units will help the NPPA and State drug controller to ensure the accessibility of drugs at affordable prices.
  • The PMRUs are societies registered under The Societies Registration Act, 1860 under the direct supervision of The State Drug Controller with its "board of governors" containing nominees of state and central government apart from other stakeholders. They will be funded by NPPA for their recurring and non-recurring expense

Essential medicines

  • “Essential medicines” are those that satisfy the priority healthcare needs, based on efficacy, safety, quality and total cost of the treatment.
  • The National List of Essential Medicines
  • The National List of Essential Medicines was first formulated in 1996 and it was revised thrice earlier in 2003, 2011, and 2015.
  • The primary purpose of NLEM is to promote rational use of medicines considering the three important aspects i.e., cost, safety and efficacy.

In NLEM, the medicines are categorized based on the level of the healthcare system as-

  • P- Primary;
  • S- Secondary and
  • T- Tertiary.

Criteria are followed for inclusion in NLEM:

  1.  be useful in diseases which is a public health problem in India
  2. be licensed/ approved Drugs Controller General (India) (DCGI)
  3. have proven efficacy and safety profiles based on scientific evidence
  4. be comparatively cost-effective
  5. be aligned with the current treatment guidelines
  6. recommended under the National Health Programs of India. (e.g. Ivermectin part of Accelerated Plan for Elimination of Lymphatic Filariasis 2018).
  7. when more than one medicine is available from the same therapeutic class, one prototype/ medically best-suited medicine of that class is to be included.
  8. price of total treatment is considered and not the unit price of a medicine
  9. fixed dose combinations are usually not included
  10. vaccines as and when are included in the Universal Immunization Program (e.g. Rotavirus vaccine).


Q. Various provisions of Patents Act, 1970, Drugs and cosmetics act 1940 and Drugs (Prices Control) Order, 1995 complement each other and however there are loopholes which are prone to be misused by firms. Critically analyze highlighting the role of The National Pharmaceutical Pricing Authority.(250 words)