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May 17, 2013

New Drug Order dated 15 May 13 for essential medicines

India on 15th May 2013 notified Drug Price Control Order 2013 that will bring down prices of essential medicines, increase the number of drugs under price control. The order is effective from 31 May 13. 

The government will regulate the rates of 652 medicines, a substantial increase over the 74 bulk drugs and their formulations that were previously under price control.
The new order authorises the National Pharmaceutical Pricing Authority (NPPA) to regulate prices of essential medicines as listed in the National List of Essential Medicines (NLEM) 2011. -

The current method of fixing prices on a cost-plus basis will be replaced by market price-linked cap for each drug.

Prices would be capped by taking the weighted average price of all brands having at least 1% or more market share (by volume)

It has clarified that players selling below the price caps cannot raise prices.

The new pricing policy seeks to incentivise domestic R&D by allowing locally discovered and developed drugs to skip price control for five years.
A new drug developed using indigenous R&D and granted patent under Indian law can seek exemption from price control from the date it starts commercial production in the country.
Second, if a pharma company discovers a new process to make an existing drug and gets a patent for it under Indian law, it can apply for a five-year relaxation from price regulation. This privilege would kick in for the drugmaker from the time it starts manufacturing the drug for the domestic market.

Drug makers will have to maintain records relating to the sales of APIs (Active Pharmaceutical Ingredients) and bulk drugs, manufactured or imported.

The order dated 15th May 13 can be downloaded from:- 

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