NPPA Caps Prices Of Oxygen Concentrators Through Trade Margin Rationalization

 The National Pharmaceutical Pricing Authority or NPPA has capped the price for oxygen concentrators.

With the help of the trade margin rationalization approach. It has been capped at the first point of sale of a product known as the price to the distributor according to the prescribed formula by invoking paragraph 19 of Drugs Prices Control Order 2013. It is because of the enhancement in demand because of the pandemic.

An oxygen concentrator is a non-listed medical device and, at present, under the individual licensing framework of CDSCO. It falls under the purview of medical device regulations in India. Moreover, due to the pandemic, the government has marked it as an important commodity and fixed its price. The formula that has been prescribed for the Maximum retail price is

Price to distributor + (PTD *TM) + applicable GST, TM = Trade margin that does not exceed 70%.

It is also recommended that the manufacturer's cap MRP of the oxygen concentrator submit all data containing details of PTD, Retail price, and existing and revised MRP by using the formula as prescribed along with other details for oxygen concentrator to NPPA. The prices that have been capped will remain active until November 30.2021, or till further notice.

The state drug controller shall make sure about the compliance of this order. All manufacturers, dealers, and medical institutions will help the state drug controller for verification of compliance. Any violation, if found, should be brought to the notice of NPPA.

On February 11.2020, the Union Health Ministry notified that all medical devices intended to be used in human beings are treated as drugs under the drugs and cosmetics act 1940 w.e.f from April 1, 2020. So, NPPA gave notification that every medical device shall be under the supervision of the provision of DPCO with effect from April 1, 2020.

Due to the increase in demand for medical oxygen following the Covid-19 pandemic, there is also an increase in demand for oxygen concentrators. Because of the international demand-supply mismatching and other issues, the oxygen concentrator prices show substantial volatility in the market. This led to petitions and public interest litigations filed in several courts all over the country for regulating its price to make sure it is available at an affordable price at this critical time.

Then the high court of Delhi, through its order on May 17, 2021, notified the government to consider the aspect as given by the petitioners that the selling price should not be fixed in absolute terms. Then the union health ministry ordered pharmaceuticals to instruct NPPA to expeditiously give facility in executing the required order in the large public interest.

#DrugLicenceRegistrationProcess  #DrugLicenseCertificateForImporters