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NPPA revises ceiling prices of scheduled drugs in tandem with WPI change

Our Bureau, New Delhi
Tuesday, April 2, 2024, 08:00 Hrs  [IST]

The National Pharmaceutical Pricing Authority (NPPA) has notified revised ceiling prices of 923 scheduled formulations with effect from April 1, 2024, in tune with the change in terms of the Wholesale Price Index (WPI) announced in the end of March, 2024, for the preceding calendar year of 2023 over the year 2022. The prices have been revised to the tune of 0.00551 per cent from the beginning of April, 2024.

The price revision has been finalised through different notifications announced at the end of March, 2024. The manufacturers of the scheduled formulations listed in the notification having maximum retail price lower than the ceiling price notified in the fiscal year 2023-24, may revise the existing MRP of their formulation on the basis of WPI at 0.00551 per cent for year 2022 in accordance with the provisions of the Drugs Prices Control Order, 2013, it said.

The manufacturers of scheduled formulations, selling the products at a price higher than the ceiling price, so fixed and notified by the government, shall revise the prices of all such formulations downward not exceeding the ceiling price specified now in the notification, which excludes Goods and Services Tax (GST), said the Authority.

“Information about the revision, if carried out, shall be forwarded to the Government in either electronic or physical form in Form-II within a period of fifteen days of such revision and non-submission of information under this sub-paragraph shall be construed as non revision of maximum retail price (MRP) and the concerned manufacturer shall be liable to deposit the amount charged over and above the pre-revised maximum retail price (MRP), along with interest thereon from the date of overcharging,” it said.

The NPPA has recently said that based on the WPI data provided by the office of the Economic Advisor, Department of Industry and Internal Trade, Ministry of Commerce and Industry, the annual change in WPI works out as (+) 0.00551% during the calendar year 2023 over the corresponding period in 2022.

“As per provisions of Paragraph 16(2) of Drug Price Control order (DPCO) 2013, the manufacturers may increase the Maximum Retail Price (MRP) of scheduled formulations on the basis of this WPI and no prior approval of the government in this regard shall be required,” said the Authority.

It may be noted that the Authority has announced annual change of 12.1218 per cent for the scheduled drugs from April, 2023, based on the data provided by the Office of the Economic Advisor, under which the WPI was worked out as 12.1218 per cent during the calendar year 2022 compared to previous year.

This was the highest increase in the recent past, after the 10.7 percent change announced in the calendar year 2021 over 2020, which was allowed with effect from April 1, 2022, by the NPPA.

The WPI increase for pharmaceuticals for the year 2020 was 1.88 per cent, in 2019 at 4.26 per cent and 2018 at 3.43 per cent. While there has been no general decrease in prices during the last few years on account of change in WPI, there was a decrease in prices during the year 2016 as compared to prices in the year 2015. WPI during the year 2016 was a negative 2.71 per cent.

The ceiling price of a scheduled formulation is fixed based on the average retail price of the said formulation having market share of one or more than one percent. As the ceiling price is based on the average retail price of medicines already available, there is a reduction in prices while fixing the retail price of scheduled medicine of an existing manufacturer. Further, the ceiling prices of scheduled medicines are revised on the 1st day of April every year on the basis of Wholesale Price Index for preceding calendar year on or before 1st April of every year.

In case of scheduled medicines, thus, the annual hike cannot be more than WPI. In case of non-scheduled formulations, NPPA ensures that their MRP do not increase by more than 10% of their MRP during the preceding twelve months.

 




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