Ceiling Price Current Affairs - 2019

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Govt. not to allow knee implants cost rise beyond 10% in a year

Government has notified that ceiling price of orthopaedic knee implants will be monitored to ensure that their cost does not increase beyond 10% in a given year.

Background

Earlier on 16 August 2017, National Pharmaceutical Pricing Authority (NPPA) notified ceiling price of orthopaedic knee implants by invoking extraordinary powers, in public interest, under Para 19 of Drugs Prices Control Order (DPCO) 2013, for a period of 1 year. Subsequently a notification was issued dated 13 August 2018, the applicability of ceiling prices fixed for orthopaedic knee implants was extended for another 1 year period i.e. up to 15 August 2019.

This led to the reduction in cost of knee implants significantly, up to 69%, resulting in a notional saving of Rs.1500 crore per annum to consumers.

Recent Development

At a meeting held on 8 August 2019, NPPA reviewed the sales of knee implants matter and noted that there has been an increased access due to knee implants becoming affordable. As per data submitted by manufacturers and importers, during period of July 2018 to June 2019, an increase of 30% in sales of knee implants was reported.

Though the medical industry has requested for a 20% (10% for year 2018 and 10% for 2019) increase in price of knee implants, government decided to further monitor price increase of knee implants as per para 20 of Drugs Prices Control Order (DPCO) 2013 that restricts price increase beyond 10% in a given year which shall be subject to a review after 1 year period.

About Knee Implant:

It is a non-scheduled medical device or drug for which Drugs Prices Control Order (DPCO), 2013 allows an annual increase upto 10% of MRP (Maximum retail price). However this was not permitted in 2018.

What is National Pharmaceutical Pricing Authority?

NPPA is independent body of experts that controls prices of pharmaceutical drugs in India. It is government regulatory agency formed on 29 August 1997.

It functions under Union Ministry of Chemicals and Fertilizers to implement and enforce provisions of Drugs Prices Control Order (DPCO) for regulating medicine prices in accordance with powers delegated to it.

DPCO is an order issued by government under ‘Essential Commodities Act’ which enables it to fix prices of some essential bulk drugs as well as their formulations.