Consequent upon the reduction in the rate of Excise duty on medicines from 8% to 4% notified by the Ministry of Finance, Department of Revenue, all manufacturers and marketing companies of formulations packs are advised to ensure that the benefit of this excise duty reduction and the reduced rate of abatement is passed on to the consumers through reduced Maximum Retail Price (MRP).  The National Pharmaceutical Pricing Authority (NPPA) in India has asked the pharmaceutical companies to reduce the MRP. 

Prices of all non-scheduled packs must accordingly be reduced downwards by 2.84% except in those categories of non-scheduled formulation packs where no excise duty has been actually paid to the Government and, therefore, no excise duty shall be chargeable in the MRP of such non-scheduled packs. The National Pharmaceutical Pricing Authority (NPPA) expects that the above reduction in MRP would be complied with by way of reduced MRP and that necessary revised price lists would be submitted to NPPA forthwith.

NPPA noted that it shall accordingly monitor the limit of 10% increase in prices per annum of non-scheduled packs based on the reduced MRP for all such packs where the batch of the formulation pack has been cleared by the manufacturer through the competent excise authorities on or after December 7, 2008 in terms of above mentioned notification of the Ministry of finance (Department of Revenue) dated December 7, 2008.