Press Note

Subject: A brief on the decisions taken in the 117^th meeting of the Authority held on 13.12.2010 and 16.12.2010 regarding fixation/revision of prices of scheduled bulk drug, CC, PC, PL & PM Norms and Formulation and other items.

            The National Pharmaceutical Pricing Authority (NPPA), an independent body of experts in the Ministry of Chemicals and Fertilizer was formed by the Govt. of India vide Resolution published in the Gazette of India No. 159 dated 29.08.97. The functions of NPPA inter-alia include fixation and revision of prices of 74 scheduled bulk drugs and formulations containing any of the scheduled bulk drugs under the Drugs (Prices Control) Order, 1995 (DPCO’95), as well as monitoring and enforcement of prices. NPPA also provides inputs to Government for policy formulation and other specific issues concerning affordable medicines to the consumers.

b.  Conversion Cost (CC), Packing Charges (PC), Process Loss (PL) and Packing Materials (PM).

The norms for conversion cost, packing charges, process loss and packing materials are required to be notified each year. Accordingly, these have been revised based on a study conducted by NPPA. The norms for CC and PC have increased by 5.76%.  In respect of process loss, the current norms have been retained. However in cases where lower process losses were noticed as per study, such lower norms have been adopted. The impact of the increase in the norms of conversion cost and packing charges on the formulations will be about 1.5%. The packing material cost norms have increased by 0.8 to 3.36%. The impact of this increase on the formulations will be about 1%. Last year, no increase was given in these norms by re-notifying the previous norms.

1.        Formulation Pricing

            The Authority considered and approved the price revision of internal ceilings rates followed in respect of certain excepients (Pharmaceutical aids) commonly used in the manufacturing of formulations.

           The Authority approved the prices in respect of 59 cases of formulation pricing.  In addition, the prices of 37 formulation packs based on pro-rata pricing related to these 4 cases out of 59 cases have been fixed.  This included 24 cases of formulations imported in finished form by different companies. In these cases the price reduction was from 10 % to 34.5% from their claimed prices. In most of the cases, the price were remained at the existing level and the price got reduced in 2 cases by 1.49% and 3.71% of Diavobet Ointment of M/s. Win Medicare and Vitalux Plus TR Tablet of M/s. Novartis respectively.  All these imported cases included Insulin based formulation, Vitamin formulation, Methyl Predisolone formulation and Calcipotriol+Betamethasone Skin Ointment.

As regards the indigenously manufactured formulation pricing, there was one new case of Naproxen Gel for treating inflammation and pain and its price was reduced by 9.7% as compared to prices claimed by the company. In respect of the cases of price revision, the prices were reduced ranging 5.3% to 36.5% from the prices claimed by the respective company. However, in certain cases, prices have been increased considering increase in raw material cost and other input cost and revision in the norms of CC, PC & PM notified on 16.12.2010, particularly in respect of Analgin Injection by 23.5% and in 3 cases of Chlorpromazine based tablets increased ranging 10.9% to 36.8%.  Prices of these formulations have been increased mainly due to bulk drug rates as applicable.  The price of Chlorpromazine tablets of 200mg will be about Rs.1 per tablet.  The Authority also reduced the prices of 7 Ibuprofen derivative formulations and 16 Ranitidine derivative formulations on suo-motu basis in order to pass on the effect of reduced notified price of these two drugs. Besides, the prices of 4 cases were fixed for the first time on suo-motu basis. A statement is enclosed for ready reference. For specific notifications, the NPPA’s website www.nppaindia.nic.in may be referred.

The formulations for which NPPA has fixed/revised the price are used for Diabetes, Pain killer, Anti- ulcer, Diahoerraial, Allergy, Asthma, Anti-Anxiety, Vitamins etc.

The manufacturers/importer affected by these price changes include Eli-Lilly, Pfizer, Novartis, Sanofi Aventis, Win Medicare, GSK, Abbott, Cadila, J. B. Chemicals, Torrent etc.

Summary of cases approved is as under.