National Pharmaceutical Pricing Authority

The National Pharmaceutical Pricing Authority (NPPA) is the Central Government body responsible for regulating medicine and medical-device prices under the drug-price-control framework. It implements the Drugs (Prices Control) Order, 2013 (DPCO), issued under the Essential Commodities Act, 1955, and monitors the availability of regulated products.

Mandate and functions

NPPA functions under the Department of Pharmaceuticals and administers the DPCO to make essential medicines available at reasonable prices while considering continuity of supply.

• It fixes or revises ceiling prices of scheduled formulations and retail prices of new drugs as provided by the DPCO.
• It collects price and market data, monitors medicine availability and reports or addresses shortages.
• It advises the Central Government on drug-pricing policy and related changes.

How prices are regulated

• For a scheduled formulation included in Schedule I of the DPCO, NPPA fixes a ceiling price that manufacturers and importers cannot exceed.
• For a non-scheduled formulation, NPPA ordinarily does not fix the initial price but monitors its maximum retail price.
• Under Paragraph 20, the maximum retail price of a non-scheduled formulation cannot be increased by more than 10 per cent during the preceding 12 months.
• Price intervention may also be undertaken in extraordinary circumstances when required in the public interest under the DPCO framework.

Medical devices and enforcement

Medical devices notified as drugs under the Drugs and Cosmetics Act are treated as formulations for DPCO price regulation. Since 1 April 2020, all medical devices have come within this framework, although scheduled and non-scheduled devices face different levels of control.

• NPPA can direct price reduction and recover the overcharged amount with interest, while monitoring whether price control disrupts availability.
• Its mandate concerns pricing and availability; quality, safety, licensing and clinical regulation remain with the competent drug-regulatory authorities.
• Price ceilings determine the permissible maximum retail price, not procurement prices or reimbursement policies.