Drugs Prices Control Order (DPCO) 2013 Current Affairs - 2020

Drugs (Prices Control) Order, 2013 saved Rs 12,447 crores per annum since implementation

The Ministry of Chemicals and Fertilizers recently reported at the Parliament that the DPCO, 2013 (Drugs Prices Control Order, 2013) has helped to save Rs 12, 447 crores per annum.

What is DPCO 2013?

The DPCO is an order that was issued by the GoI under Essential Commodities Act, 1955. The order provides details to fix the prices of the drugs, procedures to increase or decrease prices, penalties for defying the order, etc. The Order empowered the National Pharmaceuticals Pricing Authority (NPPA) to fix the threshold prices of drugs. The NPPA is allowed to fix prices only on those drugs that are listed under National List of Essential Medicines.

National List of Essential Medicines

The list was prepared by Ministry of Health and Family Welfare in 2011. The list was prepared with the World Heath Organization list as the base. It is mandatory that these medicines are to be made available in the country in adequate amounts. The last change was made to the list in 2018. Today there are 851 medicines under the list.

GoI invokes DPCO, 2013 for the first time

On December 13, 2019, the Government of India for the first-time invoked Drug Price Control Order, 2013 in order to increase the prices of 21 medicines to ensure their availability. The prices were increased by 50%. These medicines were under price regulation as majority of their ingredients were imported from China.

Background of the issue

In the past two years, pharma industry was complaining over the price rise of Active Pharmaceutical Ingredients (API). The prices have gone up by 5% to 88%. These ingredients constitute 40% to 80% of formulation cost. However, due to price ceiling of GoI, the sales of these products in the country got affected greatly as the pharmaceuticals hesitated to sell or manufacture these products.

Highlights

The price rise has been done on 21 key formulations namely BCG vaccines, malaria, penicillin, leprosy medicine, common antibiotics, anti-allergy medicines, life saving drugs like Furosemide. In January 2019, NPPA (National Pharmaceuticals Pricing Authority) received 49 application for 72 drugs. It was referred to Standing Committee on Affordable Medicines and Health Products (SCAMHP), NITI Aayog. The SCAMPH recommended that there is a need for one-time hike in prices in these formulations by 50%.

Legislation

Paragraph 19 of the DPCO 2013 deals with increase or decrease in drug prices under extraordinary circumstances. The prices have been increased under this legislation.