Minister of State for Chemicals & Fertilizers Shri B.K. Handique informed that the 74 bulk drugs specified in the First Schedule of the Drugs (Prices Control) Order, 1995 (DPCO,95) and the formulations based thereon are under price control and their prices are fixed/revised by the National Pharmaceutical Pricing Authority (NPPA) in accordance with the provisions of the DPCO, 95.  Such prices are applicable to manufacturers concerned throughout the country unless otherwise exempted under the provisions of DPCO 95.

Prices of non-Scheduled formulations are fixed by the manufacturers themselves keeping in view the various factors like cost of production, marketing/selling expenses, product quality etc.  The Government takes corrective measures where the public interest is found to be adversely affected.

The common reasons for rise in the prices of medicines, normally stated by the industry and trade are-

(a)    rise in the price of raw materials which inter alias includes increase in the raw material cost, packing material cost, conversion cost and packing charges  cost;

(b)     rise in the cost of production/import

(c)     rise in the cost of transport, freight rates;

(d)     rise in the cost of utilities like fuel, power, diesel etc.

(e)     for imported medicines, rise in the c.i.f  price and depreciation of the Rupee;

(f)     changes in taxes and duties.

The Drugs (Prices Control) Order, 1995 does not distinguish between life saving and other drugs.  There are no specific norms or guidelines to determine as to which drug can be classified as life saving drugs.  Every drug in general is considered useful in saving and prolong of life.

Government has constituted a Group of Ministers to examine the Draft National Pharmaceuticals Policy, 2006 which, inter alia, includes the issue of price control mechanism on medicines.  This Policy was submitted before the Cabinet for its approval. The Cabinet considered the Policy in its meeting held on 11.1.2007.  It was decided that a Group of Ministers (GOM) might in the first instance, consider the matter.  GOM has since been constituted and has held three meetings so far on 10.4.2007, 12.9.2007 and 30.1.2008.  GOM is yet to make its recommendations to the Cabinet.

Annexure-I

             Price increase/decrease of scheduled formulations for last three years.

                                                                                                       Unit:- Nos. of Packs

Period  No. of cases approved   Price Reduced Price Increased  Price fixed for the First Time*  No Change in Price   Total
 1  2  3  4  5  6  7
 2005-06  1018   323  94  480  41  1018
 2006-07  1020   302  113  522  27  1020
 2007-08  2012  396  65  1421  83  2012
 Grand Total   4050  1021  272  2423  151  4050
 *Prices-fixed for the first time are also price reductions.  Hence, total of column 3 & 5 give the total picture of price reductions.