What is Drugs Price Control Order (DPCO) 1995?
The Drugs Price
Control Order (DPCO), 1995 is an order issued by the Government of India
under Section 3 of the Essential Commodities Act, 1955 to regulate the
prices of drugs. The Order inter alia provides the list of price controlled
drugs, procedures for fixation of prices of drugs, method of implementation
of prices fixed by Government and penalties for contravention of provisions
among other things. Drugs and formulations have been subjected to price
control for more than three decades now. The economic reforms initiated by
the Government of India in July 1991, trickled down to the Pharmaceutical
Industry only in 1994 and that too partially. Price control in a large
number of industries has already been abolished.
Objectives of Drug Policy
As per the changes in Drug Policy, 1986
announced in September, 1994, the main objectives of the Drug Policy are as
under :
- Providing abundant quanity, at reasonable prices of essential and
life saving and medicines of good quality.
- Strengthening the quality control system over drugs and medicies
production and promoting the rational use of drugs in the country.
- Creating an environment friendly to channelising new investment into
the pharmaceutical industry with an objective to boost cost-effective
production with economic sizes and introducing new technologies and new
drugs.
- Strengthening the indigenous capability for production of drugs.
About NPPA
For the purpose of implementing provisions of DPCO,
powers of the Government have been vested in the National Pharmaceutical
Pricing Authority (NPPA). Drugs are essential for health of the society.
Drugs have been declared as essential and accordingly put under the
Essential Commodities Act. Only 74 out of 500 commonly used bulk drugs are
kept under statutory price control. All formulations containing these bulk
drugs either in a single or combination form fall under the price control
category. However, the prices of other drugs can be regulated, if warranted
in public interest.
The NPPA was established on 29th August 1997 as an independent body of
experts following the Cabinet Committee’s decision in September 1994
while reviewing the Drug Policy. The Authority, inter alia, has been
entrusted with the task of fixation/revision of prices of pharmaceutical
products (bulk drugs and formulations), enforcement of provisions of the
Drugs (Prices Control) Order and monitoring the prices of controlled and
decontrolled drugs in the country.
Features of DPCO
The essentail features of DPCO covers the
following questions:
- How are the prices of drugs and medicines in the controlled category
regulated? There are two prices for this fixed by the NPPA as per the
provisions of DPCO- Ceiling and Non Ceiling Price .
- Ceiling Price is the single maximum selling price fixed that is
applicable throughout the country in the case of each bulk drug, which
is under price control.
- Non-Ceiling Price fixed by NPPA are specific to a particular pack
size of scheduled formulation of a particular company.
- Whether NPPA has any role to regulate prices of non-scheduled drugs
(drugs not under direct price control)?
- What margins are allowed to a Wholesaler and a Retailer as per DPCO,
1995?