Drug Price Control Case Study

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Control and Decontrol of Drug Prices – A Historical Account The DPCO was first passed in 1970 and then revised in 1979, 1987 and 1995. This summary ahead tries to define the nuances of each of the acts brought in- 1947-1970 At the time of independence, most of the bulk drug was imported. Industry in India was in a nascent stage with a meagre investment of Rs. 10 crore and a production worth just Rs. 26 crore.. Till 1962, the drug industry did not have any price control. In the early 1960’s, post Chinese aggression on India the government anticipated that, drug prices might spiral out of control. Accordingly, for the first time, under the Defense of India Act of 1915, statutory control was imposed on the prices of drugs and pharmaceuticals.…show more content…
It was similar to the last two orders with the exception that the span of price control was liberalized considerably from 142 to just 76 drugs. Along with that it was notified that while fixing the maximum sale price of a bulk drug, the government was to provide either a post-tax return of 14% on net worth OR a return of 22% on capital employed. Each company could choose one of the two methods mentioned above as per its own free will. So, the choice of method is company-specific and not product-specific. Then based on the method decided, each company had to submit to the government, a detailed working of the prices of various bulk drugs that it…show more content…
637(E) dated 4 September 1997, and set it up as an attached office of the Department of Chemicals and Petrochemicals. It is responsible for implementing and enforcing the provisions of the DPCO in accordance with the powers delegated to it. NPPA is not only responsible to fix/revise the prices of controlled bulk drugs and formulations, but also to monitor the prices of decontrolled drugs in order to keep them at reasonable levels to help ensure availability of the medicines in the country. It controls and recovers from manufacturers any amounts overcharged by them with respect to the drugs sold in the country. NLEM 2013 brought about significant changes to the manner of controlling prices of drugs, and was based on three key

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