ImageTaking cognisance of the increase in input cost, the National Pharmaceutical Pricing Authority (NPPA) may allow drug makers to raise their margins in packaging cost of medicines, a government official said.

The pricing authority has asked companies to submit their actual cost data so that it can revise the norms shortly. The NPPA would also conduct a study to evaluate the prices in the market. The regulator fixes the maximum retail price of medicines through a formula which includes factors such as packaging cost, conversion cost, material cost and excise duty. According to an industry analyst, a major part of the cost of medicines is due packaging. "If packaging cost is increased, then prices of medicines may also significantly go up," he said.

Industry associations have been demanding generous packaging cost norms for innovative and specialised packaging of pharmaceuticals to combat the spurious drugs menace. "Keeping in view the economic slowdown and increasing input costs over past few years, we expect the NPPA to increase our margins. It is important for our businesses as well as for patient safety," an industry official, who asked not to be named, said.

As per the Drug Price Control Order (DPCO), 1995, NPPA is mandated to revise the conversion cost and packaging cost on an annual basis. NPPA had last revised the packaging cost in August 2008.