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NPPA Gets Strict About Medicine Pricing

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Published on : Nov 03, 2015

National Pharmaceutical Pricing Authority (NPPA) has decided to cap the prices of medicines that are to be launched in the coming fortnight. Owing to this announcement about 18 brands will lower the prices of their new medicines meant to treat pneumonia, hypertension, and diabetes. 

The authority has used paragraph 5 of the Drugs Price Control Order (DPCO), 2013 to exercise this control over prices. The prices have been fixed at an average of the MRP of the medicines being sold in the same segment for the same therapy. The averaged medicines hold a minimum market share of 1%.

The brands included in this pricing are Alembic Pharma, Franco Indian, Cipla, Merck, and Unichem. The regulator further added that if a company fails to stick to the suggested retail price, the manufacturer or the marketing company will have to pay up overcharged amount and the interest from then on as per provisions of the DPCO, 2013.

In addition to this, the regulator also stated that if any company plans to shut down production of the medicine, they will have to seek permission from the authority at least 6 months in advance. This move comes as the authority plans to provide patients suffering from chronic diseases such as hypertension and diabetes with better treatment options at a cheaper rate. Furthermore, it is also expected to keep a check on the pricing the companies formulate for medicines with probably minor tweaks to dosages or composition.

The order also states that any medicine that is priced below the ceiling will have to be sold at lesser retail price