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NPPA to revise ceiling prices of certain formulations to rectify anomaly in calculating revised prices
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Gireesh Babu, New Delhi
October 23 , 2023
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The National Pharmaceutical Pricing Authority (NPPA) has decided to revise the ceiling prices of certain formulations notified on March 31, 2023 in order to rectify an anomaly that took place while calculating the revised prices based on the Wholesale Price Index (WPI) increase of 12.1218 per cent.
The Authority has revised the ceiling prices of scheduled formulations based on the WPI for the year 2023 through various notifications on March 31, 2023.
However, some of the companies approached the Department of Pharmaceuticals (DoP) with review applications stating that while revising the ceiling prices in these notifications, the ceiling price for all formulations has been incorrectly rounded down by the Authority rather than to the nearest zero.
The Authority, following this, noted that in the past, the ceiling prices for formulations have been revised by considering rounding off up to two decimal points, that is the second decimal point rounded off based on the third decimal figure.
However, the same practices were not followed for the year 2023 inadvertently, said the Authority, and NPPA while revising the ceiling prices has ignored the third digit after the decimal point.
"This has resulted in lower/decreased ceiling prices for some formulations by Rs. 0.01 per unit," it observed.
The NPPA has revised 905 scheduled formulations including 651 fixed under the National List of Essential Medicines (NLEM) 2022 and 254 fixed under earlier NLEMs, based on the change in WPI of 12.1218 per cent with effect from April 1, 2023.
"The Authority deliberated upon the matter in detail and it was decided that ceiling prices were notified vide SO no. 1568 (E) to 1580(D) dated March 31, 2023 may be amended in respect of those formulations where non-consideration of third decimal figure has resulted in lower/decreased ceiling price for some formulations by Rs. 0.01 per unit," said the Authority.
The Authority has been working on revising the ceiling prices of scheduled formulations from the end of last year. The ceiling price revision is following the revision of Schedule 1 of the Drugs (Price Control) Order, 2013 replacing NLEM 2015 with NLEM 2022, notified by the Department of Pharmaceuticals (DoP) on November 11, 2022.
NPPA in July, this year, said that it has fixed ceiling price of over 900 scheduled formulations, including those based on NLEM 2022 and other NLEMs and later clarified that the prices has seen a reduction even after an increase based on the WPI increase of 12.1218 per cent with effect from April 1, 2023.
In July, this year, it said that the average reduction in ceiling price for 600 formulations, excluding the 91 newly added formulations out of the 691 formulations, due to price refixation under NLEM, 2022 works out to 16.71 per cent compared to the ceiling prices fixed under NLEM, 2015. This refixation of ceiling prices under NLEM 2022 resulted in net reduction of 6.73 per cent after allowing Wholesale Price Index (WPI) increase of 12.1218 per cent with effect from April 1, 2023.
The Authority, in November, 2022 said that the ceiling price fixing and revising exercise would see new prices fixed for around 954 formulations in total, comprising 388 medicines in total, based on the database from the market research firm Pharmatrac for the month of July, 2022.
While the total unique formulations for which ceiling prices are to be fixed through the move are around 819, in view of the expansions to the revised Schedule 1 and others, the number of formulations may increase beyond 954 formulations to around 1,000 formulations, said the Authority.
The minister health and family welfare and chemical and fertilisers, Dr Mansukh Mandaviya during a Parliamentary session earlier this year informed the Upper House that apart from fixing the prices of 915 scheduled formulations, the NPPA has also fixed the retail price of around 2,450 new drugs notified under DPCO, 2013 till July 17, 2023.
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