India plans special legislation to regulate drug prices
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India plans special legislation to regulate drug prices

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The legislation will modify and place the Drugs Price Control Order (DPCO) separately from the ambit of the Essential Commodities Act

New Delhi: The government is planning to bring a new legislation to modify and place the Drugs Price Control Order (DPCO) separately from the ambit of the Essential Commodities Act. The new DPCO will lay out the retail price of over 640 packs of 348 essential medicines.

The special legislation will thus give a regulatory framework, covering price control and monitoring of drugs by the National Pharmaceutical Pricing Authority (NPPA), based on the policy announced already. The NPPA however will implement the policy once the DPCO is notified.

According to the new pricing policy, prices of 348 essential drug formulations (or over 640 packs of medicines containing these drugs in various strengths and dosages) will be fixed at the arithmetic average of prices of all the drugs in that segment with a minimum of one per cent market share.

According to the existing DPCO, the pricing regulator so far used to fix prices of 74 bulk drugs, and all medicines containing one or more of these bulk drugs, based on a cost-plus formula.

For all medicines, companies were allowed to increase prices by up to 10 per cent annually, and for anything beyond that they were required to seek permission from the regulator.

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