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NPPA clarifies ‘worked out price’ will be notified as retail price for new drugs
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Gireesh Babu, New Delhi
July 10 , 2026
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The National Pharmaceutical Pricing Authority (NPPA) has clarified that the ‘worked out price’ of a new drug for existing manufacturers of scheduled formulations will be notified as retail price applicable to the applicant company and other existing manufacturers launching the same new drug within 12 months from the date of fixation of the retail price.
The Authority's clarification comes in the backdrop of the amendment to the Drugs Prices Control Order (DPCO), 2013, which mandated that once retail price of a new drug has been fixed for an applicant, any other existing manufacturer launching the same new drug within 12 months of retail price fixation of such new drug under paragraph 15 shall not apply to NPPA for retail price fixation. This is provided that such manufacturer launching the new drug shall intimate the details of launch to NPPA in Form-IA within one month of the launch.
Till the amendment, the retail price is notified as the lower of the 'worked out price' and the 'claimed price' furnished by the applicant. Such retail price is applicable only to the individual manufacturer/marketer who has applied for retail price fixation by submitting Form-I.
Pursuant to the amendment, which came into force from July 1, 2026, the retail price notified by NPPA shall also be applicable to other existing manufacturers launching the same new drug within twelve months from the date of fixation of the retail price, subject to filing Form-IA within one month from the date of such launch.
In view of this, "the Authority decided that, henceforth, the ‘worked out price’ shall be notified as the ‘retail price’," said the Authority.
"Accordingly, the applicant, as well as any other existing manufacturer covered under the said provisions, shall launch the new drug formulation at a price not exceeding the notified retail price. The applicant, however, is at liberty to launch the new drug formulation at ‘claimed price’ in case the ‘claimed price’ is lower than the notified ‘retail price’," it added.
The Department of Pharmaceuticals (DoP) has recently notified amendments to the DPCO, 2013, on provisions related to separate ceiling prices and actions related to charges on overpricing.
Amending the provisions under Paragraph 15(2) of the DPCO, the DoP has earlier this month said that any manufacturer failing to apply to this shall be liable to deposit the overcharged amount over and above the price fixed and notified by the government, along with interest from the date of launch of the new drug, in addition to penalty.
It further replaced Para 15(6) to replace the existing norm, with, "No existing manufacturer of a scheduled formulation shall launch such a new drug at a price higher than the latest retail price (plus local taxes as applicable) fixed by the government for such new drug during the preceding twelve months and in case such a manufacturer is found to sell such a new drug at a price higher than the retail price (plus local taxes as applicable) fixed by the government, such manufacturer of the new drug shall be liable to deposit the overcharged amount along with interest from the date of overcharge, in addition to the penalty.”
The DoP has also amended the Paragraph 14(2), which stipulated that the manufacturers selling a scheduled formulation at a higher price than the ceiling price and local taxes will be liable to deposit the overcharged amount with interest from the date of such overcharging.
Now, the amendment has included a proviso that the liability of the manufacturer for overcharging shall be restricted to the quantity of stock traded through the distributor or retailer, found to have effected such overcharging, if the manufacturer has been complying with the price revisions in the past.
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