Price Control Order (DPCO)
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.
The main objectives of the Drug Policy after the modifications in
the Policy of 1986 announced in September 1994 are to ensure
availability, at reasonable prices of essential and life saving and
prophylactic medicines of good quality; strengthening the system of
quality control over drug production and promoting the rational use
of drugs in the country; creating an environment conducive to
channelizing new investment into the pharmaceutical industry to
encourage cost-effective production with economic sizes and
introducing new technologies and new drugs; and strengthening the
indigenous capability for production of drugs.
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. 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.
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