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Drug Pricing and Pharmaceutical Policy
Within healthcare, the cost of medicine is the major cost driver which
constitutes nearly 60-70 percent of the total healthcare cost
The
Department of Pharmaceuticals was established on 1st July 2008 as
nodal Department for ensuring the availability of medicines at reasonable prices in the country. Availability of good quality drugs at
affordable prices with specific focus on the
poor has
been the constant endeavour of the Government. The Government is administering Drug
Price Control through the Drug Price Control Orders issued from time to
time.
Under
Drug Policy 1994, DPCO 1995 was framed with the following salient features:-
- 74 Bulk Drugs and their formulations
under price control
- Cost based pricing of bulk drugs
- Pricing of indigenously manufactured scheduled formulations under specified formula i.e Cost + MAPE (Maximum allowable Post- Manufacturing Expenses) not exceeding-
100 percent
-
For imported formulations : Landed Cost plus margin not exceeding 50 percent
-
Control of price of any non-scheduled formulation in public interest.
The
Drugs (Price control) Order, 1995 (DPCO,95) was promulgated by the Government of
India on 6th January, 1995 in exercise of the powers conferred by Section 3 of
the Essential Commodities Act . Under DPCO,1995, seventy six bulk drugs (subsequently
reduced to 74) are included in its First Schedule. These bulk drugs are scheduled
bulk drugs. The Government of India is empowered to fix and notify the price of
scheduled bulk drugs and their related formulations. NPPA has been effectively performing its role of a regulator of the prices of specified drugs.
