The Drugs Prices Control Order (DPCO), 2013 | Pharmacy Notes

The Central Government makes the DRUGS (PRICES CONTROL) ORDER, 2013 under section 3 of the Essential Commodities Act, 1955 to regulate the prices of drugs..

DPCO (DRUGS (PRICES CONTROL) ORDER) is defined as a order issued by the central government under the Essential Commodities Act, 1955 which enables it to fix the prices of some essential bulk drugs & their formulation.

DPCO 2013 was Notified on dated 15.05.2013

Under DRUGS (PRICES CONTROL) ORDER, shall be applicable to scheduled formulation & imported formulations also.

The prices of scheduled formulations, shall remain effective for one year from the date of notification of such prices under Drugs (Prices Control) Order,1995 and immediately thereafter the manufacturers may revise the prices as per the annual wholesale price index for the previous calendar year announced by Department of Industrial Promotion and Policy and on the 1st April of succeeding financial year.

 Drug prices are monitored and controlled by the National Pharmaceutical Pricing Authority (NPPA)

National Pharmaceutical Pricing Policy (NPPP) is the policy governing price control and DPCO is the order by which price control is enforced.

The Drug Price Control Orders are issued by Ministry of Chemicals and Fertilizers

Objective of DPCP (DRUGS (PRICES CONTROL) ORDER)

1. Ensure availability of essential & life saving drugs/medicines at reasonable prices.
2. Promoting the rational use of Drugs.
3. to encourage cost, effective production of drugs
4. DPCO also provides the list of price of controlled drugs
5. Procedure for fixation of prices of drug i.e. schedule & Non-scheduled formulation.
6. Implementation of prices fixed by the Central Govt.

Important Terms

Active pharmaceutical ingredients or bulk drug– means any pharmaceutical, chemical, biological or plant product including its salts, esters, isomers, analogues and derivatives, conforming to standards specified in the Drugs and Cosmetics Act, 1940 (23 of 1940) and which is used as such or as an ingredient in any formulation.

Ceiling price” means a price fixed by the Government for Scheduled formulations in accordance with the provisions of this Order

Formulation” means a medicine processed out of or containing one or more drugs with or without use of any pharmaceutical aids, for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease and, but shall not include

• (i) any medicine included in any bonafide Ayurvedic (including Sidha) or Unani (Tibb) systems of medicines;
• (ii) any medicine included in the Homeopathic system of medicine; and
• (iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply;

“Generic version of a medicine” means a formulation sold in Pharmacopeial name or the name of the active pharmaceutical ingredient contained in the formulation, without any brand name;

“Margin to retailer” for the purposes of this Order shall mean a percentage of price to retailer;

“Maximum retail price” means the ceiling price or the retail price plus local taxes and duties as applicable, at which the drug shall be sold to the ultimate consumer and where such price is mentioned on the pack;

The maximum retail price of scheduled formulations shall be fixed by the manufacturers on the basis of ceiling price notified by the Government plus local taxes wherever applicable, as under:

Maximum Retail Price = Ceiling price + Local Taxes/duties as applicable

“Scheduled formulation” means any formulation, included in the First Schedule whether referred to by generic versions or brand name;

“Non-scheduled formulation” means a formulation, which is not included in Schedule – 1.

“Pharmacoeconomics” means a scientific discipline that compares the therapeutic value of one pharmaceutical drug or drug therapy to another;

“Market share” means the ratio of domestic sales value (on the basis of moving annual turnover) of a brand or a generic version of a medicine and the sum of total domestic sales value of the all brands and generic versions of that medicine sold in the domestic market having same strength and dosage form.

“Moving annual turnover/MAT” in a particular month means cumulative sales value for twelve months in domestic market, where the sales value of that month is added and the corresponding sales of the same month in the previous year are subtracted;

“Price list” means a price list referred to in paragraphs 24 and 25 and includes a supplementary price list;

“Price to retailer” means the price of a drug at which it is sold to a retailer which includes duties and does not include local taxes;

“Retail price” means the price fixed by the Government for a new drug under paragraph 5.

“Wholesale price index” means annual wholesale price index of all commodities as announced by the Department of Industrial Policy and Promotion, Government of India, from time to time.

Calculation of ceiling price under dpco

The ceiling price of a scheduled formulation of specified strengths and dosages shall be calculated as under:

P(c) = P(s).(1+M/100)

P(c)=ceiling price of a scheduled formulation

P(s)= Average Price to Retailer for the same strength and dosage of the medicine= (Sum of prices to retailer of all the brands and generic versions of the medicine having market share more than or equal to one percent of the total market turnover on the basis of moving annual turnover of that medicine) / (Total number of such brands and generic versions of the medicine having market share more than or equal to one percent of total market turnover on the basis of moving annual turnover for that medicine.)

M = % Margin to retailer and its value =16%

Non–application of DRUGS (PRICES CONTROL) ORDER

The provisions of this order shall not apply in the case of

1. Product patent- a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970) (product patent) and not produced elsewhere, if developed through indigenous Research and Development, for a period of five years from the date of commencement of its commercial production in the country.
2. Process patent– a manufacturer producing a new drug in the country by a new process developed through indigenous Research and Development and patented under the Indian Patent Act, 1970 (39 of 1970) (process patent) for a period of five years from the date of the commencement of its commercial production in the country.
3. a manufacturer producing a new drug involving a new delivery system developed through indigenous Research and Development for a period of five years from the date of its market approval in India:

MCQ Quiz

1 DRUGS (PRICES CONTROL) ORDER, 2013 deal with

2. The drugs (prices control) order is applicable to

3. Drug price control order 2013 was issued on

4. Drug price control order 2013 deals with the following except

5. Which one is control the prices of drugs in India?

6. The drugs (price control ) Order does not take into account one of the following in fixing the retail price

7. The Drug (prices Control ) Order controls the ceiling price of the

8. As per the provisions of DPCO, Which agency fixe the Ceiling price for medicines in the controlled category?

9. What margins are allowed to a Wholesaler and a Retailer as per DPCO, 2013?

10. Full form of DPCO is

11. DPCO was issued by….

12. DPCO was introduced in the year….

13. The revision of the ceiling price is carried out every year on..

14. Manufactures can increases the MRP of scheduled formulation ….in a year

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