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DPCO

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0% found this document useful (0 votes)
68 views10 pages

DPCO

Uploaded by

prem samundre
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Drug Price Control Order

Introduction

The drug price control order is an order issued by


the government under the essential commodities act
which enables it to fix the prices of some essential
bulk drugs and their formulations.
Objectives

 To ensure availability at reasonable price of essential and


life saving and prophylactic medicines of good quality.
 Promoting the rational use of drugs in the country.
 Toencourage cost- effective production with economic
size.
DPCO 2013

 The government has notified the DPCO 2013 under the essential
commodities ACT 1995, which will give power to the NPPA to regulate
prices of 348 essential drugs along with their specified strength and
dosage under NLEM 2011.
 The new order will bring 348 drugs and their 652 formulation under
price control.
 The new policy uses a market based pricing mechanism against earlier
proposed cost.
 The selling price would be calculated by taking the simple average of
prices of all brands of a drug with a market share of 1%.
DPCO 2013

 Margins of wholesalers and retailers have been cut down to 8% to


16% respectively.
 Monitoring the MRP of non scheduled formulation.
 Control over bulk drug manufacturer.
 Drug producers will be permitted an annual increase in the retail
price with the whole sale price.
Scheduled Formulation

Scheduled formulation shall mean formulation with same strength and


same dosage form as in the scheduled.
Non Scheduled Formulation

Non Scheduled formulation means a formulation, containing the


molecule, the dosage form and strength of which are not specified in
the scheduled.
New Drug

 NLEM formulation with same specified dosage and strength as combined


with another NLEM formulation with same specified dosage for and
strength. e.g., PCM 500mg + Diclofenac 50mg.
 NLEM formulation with same specified dosage form and strength and
combined with another non scheduled formulation e.g., PCM 500mg+
Aceclofenac 50mg.
 NLEM formulation by changing its strength e.g., PCM 500mg = 325mg.
 NLEM formulation by changing its dosage form
e.g., Diclofenac 50mg tab = ointment.
Pricing of scheduled formulation

The selling price of a scheduled formulation of specified strength and dosage form as specified
under the schedule shall be calculate under….
 First the average price to the retailer of the schedule formulation shall be calculated.
 Sum of price to retailer of all the brands and generic version of the medicine having market
share more than or equal to 1%.
 There after the selling price of the schedule formulation i.e., P(c) shall be calculate by:-
P(c) = P(s). 1+M/100.
P(s) = Average price to retailer
M = Margin to retailer.
MRP

The MRP of schedule formulation shall be fixed by the manufacturers on the basis
of selling price plus local taxes wherever applicable,
MRP = Selling price + Local Taxes
The MRP of a new drug shall be fixed by manufacturer on the basis of
(Material cost + Conversion cost + Packing material cost + Packing charges) x (1
+ MAPE/100+ E.D)

MAPE = Max allowable post manufacturing expenses.


E.D = Excise duty.

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