Union Minister of State for Chemicals and Fertilizers Anupriya Patel informed the Rajya Sabha on July 30 that the government has taken action against pharmaceutical companies for overcharging. In the fiscal year 2023-24, Rs 72.73 crore was recovered from companies that were charging more than the government-fixed prices for essential drugs. This recovered amount includes penalties for violations of the Drug Price Control Order (DPCO), which sets the maximum retail prices for these drugs.
Extent of DPCO Violations
Despite the recovery, the amount is relatively small compared to the actual extent of DPCO violations in the domestic market. The current DPCO covers 384 drugs listed in the National List of Essential Medicines (NLEM) 2022. These drugs are available in thousands of dosage forms and formulations, both branded and unbranded. The significant price difference between branded and unbranded drugs underscores the lack of price standardisation in the market.
Notices and Evasion of Payment
Every year, numerous pharmaceutical companies receive notices from the National Pharmaceutical Pricing Authority (NPPA) for DPCO violations. The amounts claimed in these notices often run into hundreds of crores. However, many companies evade payment through legal challenges or other means. For example, a major Mumbai-based company was asked to pay Rs 1500 crore by the NPPA in 2010 when the National List of Essential Medicines included only 74 drugs.
Drug Prices Control Order (DPCO), 2013
The DPCO, 2013, mandates that ceiling prices for scheduled medicines are revised annually based on the Wholesale Price Index (WPI) and notified by the NPPA on April 1st each year. Both scheduled and non-scheduled drugs are covered under DPCO, 2013.
Regulations for Non-Scheduled Formulations
For non-scheduled formulations (branded or generic), no manufacturer can increase the Maximum Retail Price (MRP) by more than 10% within a 12-month period. However, manufacturers may choose not to increase prices based on market considerations. Formulations listed in Schedule-I of the DPCO are classified as scheduled, while those not included are non-scheduled. Manufacturers must comply with the Drugs and Cosmetics Act, 1945, including adhering to good manufacturing practices. The NPPA monitors prices for both scheduled and non-scheduled medicines.
Multiple Choice Questions (MCQs):
- What was the total amount recovered from pharmaceutical companies for overcharging in 2023-24?
- A) Rs 50 crore
- B) Rs 72.73 crore
- C) Rs 100 crore
- D) Rs 150 crore
- What does the recovered amount from pharmaceutical companies include?
- A) Interest charges
- B) Penalties for DPCO violations
- C) Government subsidies
- D) Research and development costs
- How many drugs are listed in the National List of Essential Medicines (NLEM) 2022 under the current DPCO?
- A) 74
- B) 150
- C) 384
- D) 500
- Which authority issues notices to pharmaceutical companies for DPCO violations?
- A) Ministry of Health
- B) National Pharmaceutical Pricing Authority (NPPA)
- C) Drug Controller General of India (DCGI)
- D) Indian Medical Association (IMA)
- What is the maximum percentage increase allowed for the MRP of non-scheduled formulations within a 12-month period according to DPCO, 2013?
- A) 5%
- B) 10%
- C) 15%
- D) 20%
- When are the ceiling prices for scheduled medicines revised and notified each year?
- A) January 1st
- B) April 1st
- C) July 1st
- D) October 1st
- Under which act must manufacturers comply with good manufacturing practices?
- A) Drug Prices Control Order, 2013
- B) Drugs and Cosmetics Act, 1945
- C) National Pharmaceutical Pricing Authority Act
- D) Essential Medicines Act
- In what year was a Mumbai-based company asked to pay Rs 1500 crore for DPCO violations?
- A) 2005
- B) 2010
- C) 2015
- D) 2020