Drug pricing by Pharmaceutical companies

The NPPA (National Pharmaceutical Pricing Authority) has recently issued an office memorandum to clarify the doubts raised by manufacturers and retailers regarding implementation of prices of drugs revised in accordance with the DPCO (Drug Price Control Orders) from time to time.

The DPCO requires manufacturers to comply with the revised prices notified under the DPCO with immediate effect from the date of notification by issuing a revised/supplementary price list to the retailers and dealers. The office memorandum issued by the NPPA on April 13, 2016 allows manufacturers to circulate the revised/supplementary price list to the dealers and retailers by means of e-mail, WhatsApp, etc. to save time and submit the price list online on the NPPA website as proof thereof.

The office memorandum also clarifies that calling/labelling/sticking of pre-manufactured batches of drugs is not mandatory to implement the revised prices. However, if the manufacturers choose to do so, they are advised to do it in a phased manner so that it does not cause excessive shortage of the concerned drugs in the market.

This clarification ensured that the revised price be implemented with immediate effect, whatever batch number the drug pertains to. The revised prices are to be implemented with immediate effect and drugs are to be sold at the notified price or price on label, whichever less.

The memorandum benefits not just the customer, who gets the prescribed drug at a lesser rate, but also resolves practical difficulties faced by manufacturers with regard to pricing of drugs.