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NPPA to Utilise October 2023 Database for Ceiling Price Fixation on 225 Formulations

In a strategic move, the National Pharmaceutical Pricing Authority (NPPA) has announced its decision to employ the price database from October 2023 to determine the ceiling prices of approximately 225 formulations. This step aligns with the revised Schedule I of the Drugs (Prices Control) Order (DPCO), 2013. The revised Schedule I initially utilised the July 2022 database, and the ceiling prices were fixed until the second half of January 2024.

The NPPA has now unveiled draft calculation sheets for ceiling prices for 35 formulations, suggesting revisions based on market data from October 2023. In a recent meeting, the NPPA highlighted its accomplishment in fixing the ceiling prices for 700 formulations under the National List of Essential Medicines (NLEM), 2022, until January 24, 2024, utilising the July 2022 database. Now, the focus is on fixing the ceiling prices for the remaining 225 formulations.

Comparing the current approach to the previous ceiling price revision exercise based on NLEM (2015, the NPPA emphasised that the October 2023 database would capture the Price to Retailer (PTR) duly revised based on the Wholesale Price Index (WPI) for 2023, providing more accurate insights.

The decision to use the October 2023 database is following Paragraph 9(7) of the DPCO, 2013, added through an amendment on January 3, 2019. This clause allows the government to consider market-based data available for any month deemed fit when fixing or revising the ceiling prices for formulations.

The NPPA, which operates under the revised Schedule I of the DPCO, replaced NLEM, 2015, with NLEM, 2022, as notified by the Department of Pharmaceuticals on November 11, 2022.

In November 2022, the NPPA announced its methodology for price revision, utilising data for July 2022. However, the recent decision underscores a shift to market data from October 2023 for better accuracy in pricing formulations. The NPPA anticipates revising prices for approximately 954 formulations, with the number potentially increasing beyond 1000 formulations.

Industry associations had advocated for using the latest market data, considering that the revision in ceiling prices was based on the Wholesale Price Index (WPI) of 10.8 percent issued on March 30, 2022. They urged the NPPA to consider October or September 2022 data post-implementation of revised prices for products, accounting for potential time lag, especially concerning imported formulations.

The NPPA's decision demonstrates a commitment to precise and market-driven pricing strategies, enhancing transparency and accuracy in the pharmaceutical pricing landscape. The move is poised to impact the overall pricing dynamics of essential medicines, reflecting the NPPA's dedication to ensuring fair and accessible healthcare for all.

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