The much awaited draft of the Proposed National Pharmaceutical Pricing Policy is out.

Salient Principles of the Proposed Policy….

1. Drugs qualifying under DPCO 2011 are based on National List of Essential Medicines (NLEM) 2011. (attached)

2. The Ceiling Price would be fixed on the basis of Weighted Average Price (WAP) of the top three brands by value (MAT value).

3. Manufacturers would be free to fix any price for their products equal to or below the Ceiling Price

4. The Ceiling Prices of drugs would be allowed to be revised annually upto the limit of the change in the Wholesale Price Index for manufactured goods, as notified by the Department of Industrial Policy & Promotion.

5. The WAP for top three selling brands of drugs / brands as required – the Reference Prices for calculation of WAP - may also change on an annual basis due to changes in the MAT value. However, there would be no annual revision of Ceiling Prices on the basis of MAT. Revision of Ceiling Prices on the basis of MAT value would be carried out only once in five years, which would likely coincide with the proposed five yearly revision in the NLEM

6. Drugs currently under DPCO 1995 will have constant price for next 2 years, after which they will come under new policy, including annual revision as per WPI as per point No. 4

7. Exemption from DPCO 2011: Drugs having weighted average price less than or equal to Rs 3/- for each unit. For such drugs the Ceiling Price will be fixed at Rs.3/- and any such drug selling at a price higher than Rs.3/- will have to bring the price down to Rs.3/-. However, this limits of Rs. 3/- shall stand revised in accordance with the change in the WPI on an annual basis.

The Government has now accounced the draft NPPP, 2011 invinting the comments from the stake holders before 30th Nov., 2011.