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National Pharmaceutical Pricing Authority (NPPA)

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On August 29, 1997, the National Pharmaceutical Pricing Authority was established as an annex office of the Department of Chemicals and Petrochemicals, which is currently the Department of Pharmaceuticals (as of July 2008). It is in charge of controlling medicine pricing in the nation and ensuring that they are accessible, affordable, and readily available to all of the nation’s citizens. The NPPA has actively contributed to capping the pricing for various medications, ventilators, and other products that have been helpful in treating the affected patients during the crisis of the continuing COVID-19 epidemic in the nation. The Drugs (Prices Control) Order(DPCO), 1995-2013, was created to fix/revise prices of restricted bulk drugs and formulations and to enforce the price and availability of medicines in the nation. 

The National Pharmaceutical Pricing Authority (NPPA) may permit a price increase of more than 10% for the medications and equipment on the National List of Essential Medicines (NLEM), according to recent news reports. The increase in the Wholesale Price Index(WPI) is driving the escalation, which is anticipated to have an effect on almost 800 pharmaceuticals and medical devices.

Significance of National Pharmaceutical Pricing Authority:

  • It was highly important during the epidemic because by stabilizing the prices of drugs and medical equipment, the general populace could afford and access them.
  • It forces the drug supplier to price drugs at MRP and no higher.
  • The NPPA makes sure of this and limits the price to make a select few critical medications widely accessible to the public since certain medicines and drugs are crucial and they should be offered to them at a low cost.
  • The National Pharmaceutical Pricing Authority makes sure that the costs of some essential medications are fixed so that every country resident may easily afford and have access to them. 

Functions of National Pharmaceutical Pricing Authority (NPPA):

  • Utilizing the authority granted to it, administer and enforce the requirements of the Drugs Price Control Order (DPCO), 1995/2013.
  • To carry out and/or support pertinent studies about the cost of medications/formulations.
  • It always keeps an eye on drug supply, spot any shortages, and take action if necessary.
  • To gather and retain information on manufacturing, exports, and imports, individual company market shares, business profitability, etc. for bulk pharmaceuticals and formulation.
  • To handle all legal issues resulting from the Authority’s judgments.
  • To provide guidance to the central government on modifying or updating the drug policy.
  • To provide support for the Central Government on parliamentary issues pertaining to drug pricing.
  • To hire/recruit officers and other Authority staff members in accordance with the regulations and guidelines established by the Government.

Initiatives for National Pharmaceutical Pricing Authority:

  • The National Pharmaceutical Pricing Authority (NPPA), which has its headquarters in New Delhi, has established Price Monitoring and Resource Units (PMRU) in each of the Indian States and Union Territories to expand its reach across the nation.
  • The Consumer Awareness, Publicity, and Price Monitoring (CAPPM) scheme led to the establishment of these PMRUs. As of January 2021, these PMRUs have already been established in 14 states/UTs. Every state and union territory in India will have a price monitoring unit established by the pharmaceutical authority.
  • Kerala, Odisha, Gujarat, Rajasthan, Haryana, Nagaland, Tripura, Uttar Pradesh, Punjab, Andhra Pradesh, Mizoram, and Jammu & Kashmir are states/UTs that have previously established PMRUs. Karnataka and Goa, where the PMRU was established in 2020, are the newest additions to this list.
  • Pharma Sahi Daam: It is an internet search engine for rapidly comparing the costs of scheduled and unscheduled medications at the time of medication purchase. The tool will display the medications’ MRP.
  • Pharma Jan Samadhan: It is a part of the government of India’s Digital India program, which seeks to give citizens more power through an open, responsible, and responsive form of government.
  • Pharma Data Bank: DrugBank is cutting-edge bioinformatics and cheminformatics tool that integrates thorough drug target (i.e. protein) and detailed drug (i.e. chemical) data. Full text, sequence, chemical structure, and relational query searches are all supported in the database. 

Achievements of National Pharmaceutical Pricing Authority:

  • Retail prices for 84 prescription formulations, including those used to treat diabetes, headaches, and high blood pressure, have been set by the drug pricing authority NPPA.
  • The pricing of formulations that are intended to lower high levels of triglycerides and cholesterol, among other things, has also been set by the National Pharmaceutical Pricing Authority (NPPA).
  • According to NPPA, the updated ceiling price for liquid medical oxygen and oxygen inhalation (medical gas) has been extended through September 30 of this year.
  • The NPPA is tasked with fixing/revising the pricing of bulk drugs and formulations under control and enforcing the costs and accessibility of medications across the nation. In order to maintain low drug prices, it also keeps an eye on their costs.
  • The Drugs (Prices Control) Order’s provisions are carried out and upheld by the regulator. It is also tasked with reclaiming money from producers that overcharged for the restricted drugs.
  • Drug manufacturers contributed Rs. 44.55 crores (Rs. 31.90 crores under DPCO 1995 and Rs.12.65 crore under DPCO 2013) in response to the demand made previously and during the aforementioned time.
  • Pharma Jan Samadhan (PJS), a system with web capabilities created by NPPA,
  • On March 12, 2015, the National Informatics Center (NIC) began providing help to establish a quick and efficient method for handling complaints about the availability and cost of medications.
  • The National Informatics Center (NIC) and the NPPA collaborated to create the Integrated Pharmaceutical Database Management System (IPDMS), and Pharma Data Bank (PDB).
  • Plan for Consumer Education and Promotion in Print, Electronic, and establishing Price Monitoring and Resource Units (PMRUs) in the State/Union Territories is a new addition to Other Media.

Price Mechanism of National Pharmaceutical Pricing Authority:

  • All medications on the National List of Essential Medicines (NLEM) are subject to price regulation.
  • Drugs for treating fever, infections, heart disease, excessive blood pressure, anemia, etc. are included in NLEM. These include widely used medications like paracetamol and azithromycin, among others.
  • The pharmaceutical department adds the drugs to Schedule I of the DPCO after the health ministry compiles a list of medications that qualify for price control.
  • The cost of the medications in this schedule is later fixed by NPPA.

Drugs Price Control Order (DPCO), 1995:

The Government of India enacted the Drugs Price Control Order, 1995, in accordance with Section 3 of the Essential Commodities Act, 1955, to control drug pricing. The Order includes, among other things, a list of pharmaceuticals with fixed pricing, guidelines for setting drug prices, instructions for carrying out prices set by the government, and sanctions for breaking rules. The authorities of the government are used to carry out the DPCO’s stipulations. and have a stake in NPPA.


The NPPA is tasked with fixing/revising the pricing of bulk drugs and formulations under control and enforcing the costs and accessibility of medications across the nation. In order to maintain low drug prices, it also keeps an eye on their costs. To ensure that both businesses and consumers benefit, the government is working to draw a clear boundary between them. Such measures must be implemented in order for them to be viable and sustained. The NPPA only regulates the costs of Scheduled Drugs, which account for around 16–17% of the pharmaceutical industry. 2013’s First Schedule of DPCO also contains a few medications used to treat cancer. The Non Scheduled category, where large markups have resulted in capricious pricing practices, has long felt the need for additional regulation.

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Last Updated : 27 Sep, 2022
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