NPPA’s April 13 OM shifts onus of implementing revised prices to trade: DG Shah, IPA
An office memorandum (OM) issued on April 13 by the National Pharmaceutical Pricing Authority’s (NPPA) seems to have shifted the onus of charging consumers the revised prices of medications to the trade. A letter to member companies of the Indian Pharmaceutical Alliance analyses the April 13 OM highlighting paragraph 2, which states, “Recalling or re-labelling or re-stickering on the label of container or pack of released stocks in the market prior to date of notifications, is not mandatory, if manufacturers are submitting revised price list, and are able to ensure price compliance at the retailer level.”
Thus, it exempts pharma manufacturers from mandatorily recalling all stocks from retail chemists, wholesalers and distributors to relabel them with the revised prices. However, the OM’s point 1(a) stipulates that the manufacturers should inform the retailers about the change in prices stating, “lt is suggested that such price lists may be issued by e-mail, WhatsApp, etc. also apart from usual practices, so as to reach large number of dealers and retailers, quickly. The manufacturers are also advised to follow electronic submission of such price list in lntegrated Pharmaceutical Database Management System (IPDMS) of the NPPA as proof thereof.”
Lauding the move, DG Shah, Secretary General, Indian Pharmaceutical Alliance explains, “The manufacturers will have deemed to have implemented the revised prices if they have complied with the Item 1(a) of the Office Memorandum. Thus, the companies have the option to not recall and re-label the old stocks.”
He further highlights, “This would put at rest the hassles of re-call, re-labelling and re-shipment of old stocks. The onus of implementing the revised price is shifted to the trade. This will also address the difficulties faced by the companies in obtaining stickers as the sticker manufacturers do not have adequate capacity to meet the sudden surge in demand.”
Provisions of DPCO 2013
The DPCO, 2013 provisions stipulate the ceiling prices or retail prices from time to time. All the manufacturers are required to implement the prices fixed or revised by the NPPA as per paragraph 24 of the DPCO, 2013. It had stipulated that the manufacturers need to ensure compliance with the prices fixed or revised by the NPPA, from date of price notification by issuing a revised price list or supplementary price list, if required, in Form V to dealers, the retailers, State Drug Controllers and the Government.
This has been a cause for concern among pharma manufacturers as the industry had interpreted the provision to mean that it was mandatory to recall all the old stock for re-labelling and re-stickering to reflect the revised prices. Shah, on behalf of IPA member companies, had raised this issue with Ananth Kumar, Minister of Chemicals & Fertilizers, in a letter dated March 9 this year. The letter outlines the practical difficulties of adhering to Paragraph 24(2) of the DPCO 2013 which mandates the manufacturer to recall all stocks from all retail chemists, wholesalers and distributors and re-label them with the revised prices. According to the petition from IPA, “The entire exercise of recall and re-shipment takes about four months. In the process, the products lose four months of their shelf life. Products with shorter expiry become date expired. Both these result in the national waste. Thus, burden of compliance, viz’ procedure, cost and time’ is disproportionate to the outcome.”