In Focus: Regulation of Drug prices in India.

In Focus: Regulation of Drug prices in India.

Drugs under price control:

  • All the drugs marketed in India are not under price control.
  • Health Ministry after consultation with experts, draws up a National List of Essential Medicines (NLEM). These medicines are essential for the treatment of common conditions and are thus are put under price control.
  • In addition, the government also has the power to bring any item of medical necessity under price control.

Who regulates the drug prices in India?

  • The National Pharmaceutical Pricing Authority (NPPA) is an independent body of experts under the Union Ministry of Chemicals and Fertilizers that monitors and controls pharmaceutical drugs in India.

How drug prices are regulated?

  • The NPPA regularly publishes lists of medicines and their maximum ceiling prices.
  • NPPA fixes the ceiling prices by averaging the prices of all brands of a medicine with more than 1% market share.
  • The Drugs Prices Control Orders (DPCO) are issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.

Note: The ceiling prices are usually notified as exclusive of excise duty, local tax, etc.


Functions of NPPA:

  • Implementation and enforcement of the provisions of the Drugs (Prices Control) Order.
  • Monitoring the availability of drugs, identify shortages, if any, and to take remedial steps.
  • Collect/ maintenance of data on production, exports and imports, market share of individual companies, profitability of companies etc, for bulk drugs and formulations.
  • Rendering advice to the Central Government on changes/ revisions in the drug policy



Section : Science & Tech