The National Pharmaceutical Pricing Authority (NPPA) has released the second set of draft ceiling price calculations for 43 formulations, as part of fixing the ceiling prices for the medicines under the National List of Essential Medicines (NLEM), which were added to Schedule 1 of DPCO, 2013.

The ceiling price revision was announced recently after the revision of Schedule 1 of the Drugs (Price Control) Order, 2013, replacing NLEM 2015 with NLEM 2022, as notified by the Department of Pharmaceuticals (DoP) on November 11, 2022.

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NPPA releases draft working sheets for ceiling price fixation of 954 formulations

On November 25, it released the draft calculation sheet for 121 drugs as the first phase, and now, the Phase II list has been released seeking industry response.

Out of the 43 formulations in the second list, almost 28 are proposed to have a price reduction of between 10-20 percent compared to the current ceiling price, while eight will have the prices reduced below 10 percent and six will have a reduction of between 20-30 percent from the current ceiling prices. One drug will see its ceiling price decline by more than 30 percent, on the list.

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The combination of piperacillin 4 gm and tazobactam 500 mg powder for injection has been recommended at Rs. 315.82 per unit as compared to the current ceiling price of Rs. 487.76, with a reduction of 35.25 percent according to the draft working paper.

There are around 16 companies that have a market share of one percent and above for the drug, which has a Moving Annual Total (MAT) of Rs. 423.17 crore considered for price calculation.

The lowest price reduction, according to the second list, is for prednisolone 5 mg tablet, proposed at Rs. 0.61 per tablet, as compared to the Rs. 0.62 per tablet current ceiling price, which is a 1.61 percent reduction.

While there are two companies that have a market share of one percent more for the drug, the draft calculation sheet has listed ten brands from pharma players including Pfizer, Lupin, Mankind Pharma, Macleods Pharma, Medopharm, and Psychotropics India, among others.

For the antibiotic formulation cefixime 200 mg, which has a total MAT of around Rs. 591 crore and 13 major players with a market share of one percent or above, the price has been fixed at Rs. 8.40 per tablet, as compared to Rs. 10.66 per tablet, with a 21.20 percent reduction.

Download NLEM lists, click below links

National-List-of-Essential-Medicines-2022

National-List-of-Essential-Medicines (NLEM)-2015

National-List-of-Essential-Medicines (NLEM)-2011

National-List-of-Essential-Medicines-NLEM-2003

The NPPA also lists around 222 brands for the formulation with the specified strength and different package sizes, being in the market at present.

The first list of draft calculations of the ceiling prices of 121 drugs, including many of the commonly used essential drugs, released earlier by the NPPA had almost 44 percent witnessing a price reduction between 10-20 percent from the current ceiling price.

Two formulations have seen prices reduced by more than 50 percent and three others between 40-50 percent, according to the draft calculation sheet.

Around 54 drugs out of the 121 are proposed to have their prices reduced by 10–20 percent, while another 28 are expected to see their prices reduced by 20–30 percent.

Around 11 drugs are proposed to have prices reduced below 10 percent from the existing ceiling prices. Nine formulations will see their prices reduced by 30-40 percent if the draft gets through in the current form.

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In a recent meeting, the Authority decided to release the draft working sheets for the fixation of ceiling prices for around 954 formulations, comprising 388 medicines, based on the database from market research firm Pharmatrac for the month of July 2022.

“Companies may submit their representations to NPPA on the draft working sheets supporting their Price to Retailer (PTR) and Moving Annual Turnover (MAT) data, along with supporting documents like copies of invoices to retailers and samples of July 2022 in order to take necessary action in this regard.

Such representations should reach NPPA within 10 working days of the upload of the draft worksheet,” said the Authority.

Further issues regarding the methodology that is likely to come up during the price fixation may be taken up for deliberation in the subsequent meetings of the Authority, it added.

While the total number of unique formulations for which ceiling prices are to be fixed through the move is around 819, in view of the expansions to the revised Schedule 1 and others, the number of formulations may increase beyond 954 formulations to around 1000 formulations, said the Authority.

The NLEM 2022 has 56 formulations of newly added drugs, while around 763 are continued from NLEM, 2015. 

The ceiling price revision is following the revision of Schedule 1 of the Drugs (Price Control) Order, 2013 replacing NLEM 2015 with NLEM 2022, notified by the Department of Pharmaceuticals (DoP) on November 11, 2022.

As per the provisions of the DPCO, 2013, the ceiling prices for the medicines in Schedule I have to be fixed within 60 days of the notification of the schedule.

While the general practice is that ceiling prices are fixed using market-based data for fixing the ceiling price of schedule formulation due to revision in the first schedule shall be the data available for the month ending immediately before six months of notification of the revision in the first schedule, the authority used data beginning in July 2022, paying attention to industry associations' representations.

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