Union Cabinet of India approved the National Pharmaceutical Pricing Policy

The Union Cabinet of India on 22 November 2012 passed the National Pharmaceutical Pricing Policy (NPPA). As per the new pricing policy declared by the Union Government, 348 essential drugs would come under price control policy of the nation, which would lead to price reduction of the same.

The policy was approved by the Union Cabinet with an objective to bring in a regulatory framework to make sure that the pricing of essential drugs remains under control and are made available in the market at reasonable prices.

The approval came in as a response to the deadline of 27 November 2012 set by the Supreme Court of India for finalization of a policy that to without altering or hampering the mechanism for cost-based drug pricing policy in existence. The move would bring down the cost of the drugs to an average of 30 percent as the pricing now would be fixed following the simple average of the rates of all the brands that have more than one percent of market share in the pharmaceutical industry. Following the rules of the policy, the companies will have to take a clearance by NPPA to increase the prices beyond 10 percent on all the 348 drugs enlisted in the new National Pharmaceutical Pricing Policy.