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The National Pharmaceuticals Pricing Authority (NPPA) invoked its extraordinary powers under Paragraph 19 of the Drugs (Prices Control) Order, 2013 (DPCO), to put a cap on the trade margin of the following medical devices — oxygen concentrators, pulse oximeters, glucometers, BP monitors, nebulizers and digital thermometers with an aim to make these medical devices affordable during the evolving situation of the COVID pandemic and to regulate the trade margin on these medical devices. NPPA is formed under the Department of Pharmaceuticals which is a division of the Ministry of Chemicals and Fertilizers to regulate and monitor prices of drugs/formulations and oversee the implementation of the DPCO.
Earlier, NPPA vide its Office Memorandums dated June 29, 2020, and February 16, 2021, decided to seek information from the manufacturers about the Maximum Retail Price (MRP) of pulse oximeters, oxygen concentrators, nebulizers, blood pressure monitoring machines, digital thermometers, and glucometers.
Based on the information gathered by NPPA, it was noted that the trade margins of these medical devices ranged from 3% to 709%, therefore, NPPA invoked its extra ordinary powers under the provisions of Paragraph 19 of the DPCO to regulate the price of these medical devices through the ‘Trade Margin Rationalisation Approach’ in public interest.
NPPA by its Order dated June 3, 2021, capped the trade margin for oxygen concentrators and by its Order dated July 13, 2021, capped the trade margin for pulse oximeters, blood pressure monitoring machines, nebulizers, digital thermometers and glucometers (“Orders”), up to 70% under the Trade margin Rationalisation Approach. This move will result in significant savings to the consumers and rationalization in the price of these medical devices.
The manufacturers of these medical devices have to adhere to the following compliances under both the Orders:
- In case a manufacturer is intending to launch oxygen concentrators, pulse oximeters, nebulizers, blood pressure monitoring machines, digital thermometers and glucometers, the MRP will be fixed as per the formula at Table-A of the Orders based on current Price To Distributor (PTD).
- The revised prices for oxygen concentrators shall come into effect from June 09, 2021.
- The revised prices for pulse oximeters, blood pressure monitoring machines, digital thermometers, nebulizers and glucometers shall come into effect from July 20, 2021.
- The manufacturers of these medical devices selling at a price higher than the MRP so computed as per Table-A, shall revise the prices downward, not exceeding the MRP computed by using the formula provided in the said Orders.
- The manufacturer shall issue a price list in Form–V as per Paragraph 25 of the DPCO to NPPA and submit a copy to the State Drug Controller and Dealers by June 07, 2021 for oxygen concentrators and by July 20, 2021 for pulse oximeters, blood pressure monitoring machines, nebulizers, digital thermometers and glucometers.
- As per Para 25(3) of the DPCO, every retailer, dealer, hospital and institution shall display the price list and the supplementary price list, as furnished by the manufacturer, on a conspicuous part of the business premises in a manner so as to be easily accessible to any person wishing to consult the same.
- The manufacturers not complying with the MRP so computed as per Table-A and notes specified hereinabove shall be liable to deposit the overcharged amount along with 15% interest p.a. from the date of increase in price in addition to a penalty of upto 100% of the overcharged amount under the provisions of the DPCO read with the Essential Commodities Act, 1955.
- The price so fixed shall remain in force upto November 30, 2021, for oxygen concentrators and upto January 31, 2022 for pulse oximeters, blood pressure monitoring machines, nebulizers, digital thermometers and glucometers.
For more detailed please follow these links for Order copies:
Order for oxygen concentrators dated June 3, 2021 – https://www.nppaindia.nic.in/wp-content/uploads/2021/06/227375.pdf
Order for pulse oximeters, blood pressure monitoring machines, nebulizers, digital thermometers and glucometers dated July 13, 2021 – https://www.nppaindia.nic.in/wp-content/uploads/2021/07/Notification-TMR-5-Medical-Devices.pdf
Author:
Pradnesh Warke
Associate Partner