Ministry of Chemicals and Fertilizers
(Department of Pharmaceuticals)

Dated: May 15, 2013

ORDER

S.O. 1221(E).- In exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955, (10 of 1955), and supersession of the Drug (Prices Control) Order, 1995, except as respect to  things  done  or  omitted  to  be  done  before  such  supersession,  the  Central Government hereby makes the following Order, namely:-

1. Short title and commencement.-

(1) This Order may be called the Drugs (Prices Control) Order, 2013.

(2)  It shall come into force on the date of its publication in the Official Gazette.

2. Definitions.-

(1) In this Order, unless the context otherwise requires,-

(a) “Act” means the Essential Commodity Act, 1955 (10 of 1955);

(b) "active pharmaceutical ingredients or bulk drug" means any pharmaceutical, chemical, biological or plant product including its salts, esters, isomers, analogues and derivatives, conforming to standards specified in the Drugs and Cosmetics Act, 1940 (23 of 1940) and which is used as such or as an ingredient in any formulation;

(c) “brand” means a name, term, design, symbol, trademark or any other feature that identifies one seller’s drug as distinct from those of other sellers;

(d) "ceiling price" means a price fixed by the Government for Scheduled formulations in accordance with the provisions of this Order;

(e) "dealer" means a person carrying on the business of purchase or sale of drugs, whether as a wholesaler or retailer and includes his agent;

(f) "distributor" means a person engaged in the work of distribution of drugs and includes an agent or a stockist  for stocking drugs for sale to a dealer;

(g) “existing manufacturer” means manufacturer existing on the date of publication of this order in the Official Gazette.

(h) "Form" means a form specified in the Second Schedule;

(i) "formulation" means a medicine processed out of or containing one or more drugs with or without use of any pharmaceutical aids, for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease and, but shall not include-

(i)   any medicine included in any bonafide Ayurvedic (including Sidha) or Unani (Tibb) systems of medicines;

(ii)  any medicine included in the Homeopathic system of medicine; and

(iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply;

(j) “generic version of a medicine” means a formulation sold in pharmacopeial name or the name of the active pharmaceutical ingredient contained in the formulation, without any brand name;

(k) "Government" means the Central Government;

(l) "import" with its grammatical variations and cognate expressions means bringing a drug into India from a place outside India for its sale;

(m) “local taxes” means any tax or levy (except excise or import duty included in retail price) paid or payable to the Government or the State Government or any local body under any law for the time being in force by the manufacturer or his agent or dealer;

(n) "manufacturer" for the purpose of this Order means any person who manufactures, imports and markets drugs for distribution or sale in the country;

(o) “market share” means the ratio of domestic sales value (on the basis of moving annual turnover) of a brand or a generic version of a medicine and the sum of total domestic sales value of the all brands and generic versions of that medicine sold in the domestic market having same strength and dosage form;

(p) “margin to retailer” for the purposes of this Order shall mean a percentage of price to retailer;

(q) “market based data” means the data of sales related to a drug collected or obtained by the Government as deemed fit, from time to time;

(r) “maximum retail price” means the ceiling price or the retail price plus local taxes and duties as applicable, at which the drug shall be sold to the ultimate consumer and where such price is mentioned on the pack;

(s) “moving annual turnover” in a particular month means cumulative sales value for twelve months in domestic market, where the sales value of that month is added and the corresponding sales of the same month in the previous year are subtracted;

(t) “National List of Essential Medicines” means National List of Essential Medicines, 2011 published by the Ministry of Health and Family Welfare as updated or revised from time to time and included in the first schedule of this order by the Government through a notification in the Official Gazette;

(u) “new drug”    for the purposes of this Order shall mean a formulation launched by an existing manufacturer of a drug of specified dosages and strengths as listed in the National List of Essential Medicines by combining the drug with another drug either listed or not listed in the National List of Essential Medicines or a formulation launched by changing the strength or dosages or both of the same drug of specified dosages and strengths as listed in the National List of Essential Medicines.

(v) "non-scheduled formulation" means a formulation, the dosage and strengths of which are not specified in the First Schedule;

(w) “pharmacoeconomics”  means a scientific discipline that compares the  therapeutic value of one pharmaceutical drug or drug therapy to another;

(x) "price list" means a price list referred to  in paragraphs 24 and 25 and  includes a supplementary price list;

(y) “price to retailer” means the price of a drug at which it is sold to a retailer which includes duties and does not include local taxes;

(z) "retail price" means the price fixed by the Government for a new drug under paragraph 5;

(za)  "retailer" means a dealer carrying on the retail business of sale of drugs to customers;

(zb)  “scheduled  formulation"  means  any  formulation,  included  in  the  First  Schedule whether referred to by generic versions or brand name;

(zc)  "schedule" means a Schedule appended to this Order;

(zd)  "wholesaler" means a dealer or his agent or a stockist engaged in the sale of drugs to a retailer, hospital, dispensary, medical, educational or research institution or any other agency;

(ze) “wholesale price index” means annual wholesale price index of all commodities as announced by the Department of Industrial Policy and Promotion, Government of India, from time to time.

(2) All other words and expressions used herein and not defined but defined in the Act or the Drugs and Cosmetics Act, 1940 (23 of 1940) shall have the meanings respectively assigned to them in the said Acts.

3. Directions  to  manufacturers  of  active  pharmaceutical  ingredients  or  bulk  drugs  or formulations.-

The Government may,-

(i) with a view to achieve adequate availability and to regulate the distribution of drugs, in case of emergency or in circumstances of urgency or in case of non-commercial use in public interest, direct any manufacturer of any active pharmaceutical ingredient or bulk drug or formulation to increase the production and to sell such active pharmaceutical ingredient or bulk drug to such other manufacturer(s) of formulations and to direct formulators to sell the formulations to institutions, hospitals or any agency as the case may be;

(ii)  for  the  purpose  of  giving  any  direction  under  sub-paragraph  (i),  call  for  such information from manufacturers of active pharmaceutical ingredients or bulk drugs or formulations, as it may consider necessary and such manufacturer shall furnish the required information within such time the Government may fix.

4. Calculation of ceiling price of a scheduled formulation.-

(1) The ceiling price of a scheduled formulation of specified strengths and dosages as specified under the first schedule shall be calculated as under:

Step1.  First the Average Price to Retailer of the scheduled formulation i.e. P(s) shall be calculated as below:

Average Price to Retailer, P(s) = (Sum of prices to retailer of all the brands and generic versions of the medicine having market share more than or equal to one percent of the total market turnover on the basis of moving annual turnover of that medicine) / (Total number of such brands and generic versions of the medicine having market share more than or equal to one percent of total market turnover on the basis of moving annual turnover for that medicine.)

Step2.  Thereafter,  the  ceiling  price  of  the  scheduled  formulation  i.e.  P(c)  shall  be calculated as below:

P(c) = P(s).(1+M/100), where

P(s) = Average Price to Retailer for the same strength and dosage of the medicine as calculated in step1 above.

M = % Margin to retailer and its value =16

(2) The ceiling price calculated as per sub-paragraph (1) and notified by the Government shall be applicable to scheduled imported formulations also.

5. Calculation of retail price of a new drug for existing manufacturers of scheduled formulations.-

(1)  The  retail price  of  the  new  drug  available  in  domestic  market  shall  be calculated as provided in sub-paragraph (1) of paragraph 4.

(2)  (i)   the price to retailer of a new drug, not available in domestic market, shall be fixed by the Government on the principles of “Pharmacoeconomics” of the new drug, on the recommendation of a Standing Committee of Experts formed under paragraph 15.

(ii) the retail price of such new drug shall be fixed by adding sixteen percent margin to retailer on the price to retailer as fixed in item (i):

6. Ceiling price of a scheduled formulation in case of no reduction in price due to absence of competition.-

(1) where the average price to retailer of a scheduled formulation, arrived at as per the formula specified in sub-paragraph (1) of paragraph 4, has the effect of,-

(a)  no reduction in average price to retailer with respect to the prices to retailer of the schedule formulation; and

(b) there are less than five manufacturers for that formulation having one percent or more market share, the ceiling price shall be calculated as under:-

(i) in  the  event  of  other  strengths  or  dosage  forms  of  the  same  scheduled formulation is   available in the list of scheduled formulation, the average price to retailer shall be calculated  as under:

Step1: First the Average Price to Retailer of such scheduled formulation i.e. P(s) shall be calculated as under:

P(s) = Pm{1-(Pi1+Pi2+…)/(N*100)} Where,

Pm = Price to Retailer of highest priced scheduled formulation under consideration.

Pi    =   % reduction in Average Price to Retailer of other strengths and dosage forms (calculated as in step1 of sub-paragraph (1) of paragraph 4) in the list of schedule formulations w.r.t the highest priced formulation taken for calculating the average price to retailer of such strengths and dosage forms.

N = Number of such other strengths or dosage forms or both in the list of schedule formulations

Step2. Thereafter, the ceiling price of the scheduled formulation i.e. P(c) shall be calculated as under:

P(c) = P(s).(1+M/100), where

P(s)  =  Average  Price  to  Retailer  of  the  scheduled  formulation  as calculated in step1 hereinabove and

M  =  % Margin to retailer and its value=16

(ii) in the event of other strengths or dosage forms of the scheduled formulation is not available in the schedule but there are other scheduled formulations in same sub- therapeutic category as that of the scheduled formulation, then the Ceiling Price shall be calculated as under:

Step1: First the Average Price to Retailer of such scheduled formulation i.e. P(s) shall be calculated as under:

P(s) = Pm{1-(Pi1+Pi2+…)/(N*100)}, Where,

Pm =  Price of highest priced formulation taken for calculating the average price to retailer of the formulation under consideration..

Pi   =  %  reduction in Average Price to Retailer of   other   schedule formulations (calculated as in step1 of sub-paragraph (1) of paragraph 4) in same sub-therapeutic category as that of the scheduled formulation under consideration w.r.t the highest priced formulation taken for calculating the average price to retailer.

N = Number of such other schedule formulations in same sub-therapeutic category as that of the scheduled formulation under consideration.

Step2. Thereafter, the ceiling price of the scheduled formulation i.e. P(c) shall be calculated as under:

P(c) = P(s)*(1+M/100), where

P(s)  =  Average  Price  to  Retailer  of  the  scheduled  formulation  as calculated in step1 above and

M  =  % Margin to retailer and its value=16

Explanation.- where the scheduled formulation under consideration is coming under more than one sub-therapeutic category, the Average Price to Retailer of the scheduled formulation shall be calculated after taking into consideration the percentage reduction in Average Price to Retailer of other schedule formulations under all such sub-therapeutic categories and the lowest average price to retailer shall be taken for calculating the ceiling price of the scheduled formulation under consideration;

(iii) in case the other strengths or dosage forms of the scheduled formulation are not available in the schedule and there is no sub therapeutic category of the scheduled under consideration, the ceiling price shall be calculated as under:

Step1: First the Average Price to Retailer of such scheduled formulation i.e. P(s) shall be calculated as under:

P(s) = Pm{1-(Pi1+Pi2+…)/(N*100)} Where,

Pm =  Price of highest priced formulation taken for calculating the average price to retailer of the formulation under consideration.

Pi   =   %  reduction  in  Average   Price   to   Retailer   of   other   schedule formulations (calculated as in step1 sub-paragraph (1) of paragraph 4) in same therapeutic category as that of the scheduled formulation under consideration w.r.t the highest priced formulation taken for calculating the average price to retailer.

N = Number of such other schedule formulations in same therapeutic category as that of the scheduled formulation under consideration.

Step2. Thereafter, the ceiling price of the scheduled formulation i.e. P(c) shall be calculated as under:

P(c) = P(s).(1+M/100), where

P(s) = Average Price to Retailer of the scheduled formulation as calculated in step1 above and

M  = % Margin to retailer and its value=16

Explanation.- where the scheduled formulation under consideration is coming under more than one therapeutic category, the Average Price to Retailer of the scheduled formulation shall be calculated after taking into consideration the percentage reduction in Average Price to Retailer of other schedule formulations under all such therapeutic categories and the lowest average price to retailer shall be taken for calculating the ceiling price of the scheduled formulation under consideration.

(2)  Notwithstanding anything contained in this paragraph, where the price has been fixed and notified by the Government under the Drugs (Prices Control) Order, 1995 the provisions of sub- paragraph (1) shall not apply.

7. Margin to retailer.- While fixing a ceiling price of scheduled formulations and retail prices of new drugs, sixteen percent of price to retailer as a margin to retailer shall be allowed.

8. Maximum retail price.-

(1) The maximum retail price of scheduled formulations shall be fixed by the manufacturers on the basis of ceiling price notified by the Government plus local taxes wherever applicable, as under:

Maximum Retail Price = Ceiling price + Local Taxes as applicable

(2) The maximum retail price of a new drug shall be fixed by the manufacturers on the basis of retail price determined by the Government plus local taxes wherever applicable, as under:

Maximum Retail Price = Retail Price + Local Taxes as applicable

9. Reference data and source of market based data.-

(1) Initially, the source of market based data shall be the data available with the pharmaceuticals market data specializing company - IMS Health (IMS) and if the Government deems necessary, it may validate such data by appropriate survey or evaluation.

(2)  The  Government  may  in  the  due  course  of  time  come  out  with  other  appropriate mechanism of collecting or obtaining the market based data related to drugs and the decision of Government with respect to collection or obtaining of data shall be final.

(3) The market based data, for fixing the ceiling price of scheduled formulations for the first time after the notification of this order, shall be the data of May, 2012.

(4) The market based data for fixing the retail price of new drugs available in the market, shall be the data available for the month ending immediately before six months of receipt of application for fixing the price of the new drug.

(5) The market based data for fixing the ceiling price of a scheduled formulation due to a revision in the first schedule shall be the data available for the month ending immediately before six month of notification of revision in the first schedule.

(6) Notwithstanding anything contained in this order, the reference date for the formulations which are part of the Drugs (Prices Control) Order, 1995 shall be as per the provisions of paragraph 10 of this Order.

10. Pricing of the formulations covered under Drugs (Prices Control) Order, 1995.-

(1) The prices of scheduled formulations,  which are also specified in the First Schedule to the Drugs (Prices Control) Order, 1995, fixed and notified under the provisions of the said order, up to 31st May,  2012,  shall  remain  effective  for further  one  year  i.e.  up  to  30th  May’  2013  and  the manufacturers  may  revise  the  prices  of  such  scheduled  formulations  as  per  the  annual wholesale price index for the previous calendar year announced by Department of Industrial Promotion and Policy and thereafter the formula as in sub- paragraph (1) of paragraph 4 of this Order shall be applied for fixing the ceiling prices of such formulations.

(2) The prices of scheduled formulations, which are also specified in the First Schedule to the Drugs (Prices Control) Order, 1995, fixed and notified under the provisions of Drugs (Prices Control) Order,1995 after 31st  May,2012, shall remain effective for one year from the date of notification of such prices under Drugs (Prices Control) Order,1995 and immediately thereafter the  manufacturers  may  revise  the  prices  as  per  the  annual  wholesale  price  index  for  the previous calendar year announced by Department of Industrial Promotion and Policy and on the 1st April of succeeding financial year, the formula as in sub-paragraph (1) of paragraph 4 of this Order shall be applied for fixing the ceiling prices of such schedule formulations.

(3) The prices of scheduled formulations, which are specified in the Drugs (Prices Control) Order, 1995 but not specified in the First Schedule of this order, fixed and notified under the provisions of the said order, up to 31st May,2012, shall remain effective for further one year i.e. up to the 30thMay’2013 and thereafter prices of such formulations shall be regulated as in case of other non-scheduled formulations as stated in paragraph 20 of this Order.

(4) The prices of scheduled formulations, which are specified in the Drugs (Prices Control) Order, 1995 but not specified in the First Schedule of this order, fixed and notified under the provisions of the said order, after 31st  May,2012, shall remain effective for one year from the date of notification of such prices  and thereafter prices of such formulations shall be regulated as in case of other non-scheduled formulations as stated in paragraph 20 of this Order.

11. Ceiling price or retail price of a pack.-

(1) The average price to retailer calculated as per the provisions in paragraphs 4, 5 and 6 shall be on the dosage basis, (per tablet, per capsule or injection in volume as listed in first schedule) and the ceiling price or retail price of a pack shall be reached by multiplying the same with the number or quantity in the pack as the case may be.

(2) In the event of the unit of the dosage for a scheduled formulation not available in the first schedule, the lowest pack size for that category of medicine, as specified in the Drugs and Cosmetics Act, 1940 (23 of 1940) and the rules thereunder, shall be taken as unit dosage for calculating the ceiling price or retail price  as the case may be, for that scheduled formulation and  this  shall  be  applicable  while  calculating  the  per  unit  price  of  even  non-scheduled medicines for arriving at the retail price in case of paragraph 5.

12. Price of formulations (branded or generic version) listed in the National List of Essential Medicines, launched by a manufacturer.-

(1) A manufacturer, launching a scheduled formulation, shall be free to fix the price of the scheduled formulation equal to or below the ceiling price fixed for that schedule formulation by the Government.

(2) Where  an  existing  brand  is  re-launched  by  another  manufacturer  the  provisions  of paragraph 13 shall be applicable.

13. Price of scheduled formulations for the existing manufacturers.-

(1) All the existing manufactures of scheduled formulations, selling the branded or generic  or both the versions of scheduled formulations at a price higher than the ceiling price (plus local taxes as applicable) so fixed and notified by the Government, shall revise the prices of all such formulations downward not exceeding the ceiling price (plus local taxes as applicable):

Provided, that in case of scheduled formulations produced or available in the market before the date of notification of ceiling price, the manufacturers shall ensure within a period of forty-five days of the date of such notification that the maximum retail price of such scheduled formulation does not exceed the ceiling price (plus local taxes as applicable).

(2) All the existing manufactures of scheduled formulations, selling the branded or generic or both the versions of scheduled formulations at a price lower than the ceiling price (plus local taxes  as  applicable)  so fixed  and notified  by  the  Government  shall  maintain  their existing maximum retail price.

(3) Annual increase in maximum retail price may be carried out as per the increase in the wholesale price index with respect to previous year as per the provision of sub-paragraphs (2) and (3) of paragraph 16.

Provided that in case of decline in wholesale price index, a corresponding reduction in the prices shall be made as per the provision of sub-paragraph (4) of paragraph 16.

14. Fixation of ceiling price of scheduled formulations.-

(1) The Government shall fix and notify the ceiling prices of the scheduled formulations in accordance with the provisions of the paragraphs  4  and  6,  as  the  case  may  be, and  no  manufacturer  shall  sell  the  scheduled formulations at a price higher than the ceiling price (plus local taxes as applicable) so fixed and notified by the Government.

(2) Where any manufacturer sells a scheduled formulation at a price higher than the ceiling price (plus local taxes as applicable) fixed and notified by the Government, such manufacturers shall be liable to deposit the overcharged amount along with interest thereon from the date of such overcharging.

15. Fixation of retail price of a new drug for existing manufacturers of scheduled formulations.-

(1) The Government shall form a Standing Committee of such Experts, as it may deem fit, within sixty days of notification of this order with a view to recommend the retail prices of new drugs on the principles of “Pharmacoeconomics”.

(2)  Where  an  existing  manufacturer  of  a  drug  with  dosages  and  strengths  as  specified  in National List of Essential Medicines launches a new drug, such existing manufacturers shall apply for prior price approval of such new drug from the Government in Form-I specified under Schedule-II of this Order.

(3)  On  receipt  of  the  application  under  sub-paragraph  (2),  in  the  event  of  the  new  drug available in domestic market, the Government shall fix the retail price of the new drug in accordance with the provision of sub-paragraph(1) of paragraph 5 and in the event of the new drug not available in domestic market, the Government shall forward the same to the Standing Committee of Experts who shall examine the application on the principles of “Pharmacoeconomics” and make recommendations of retail price of the new drug to the Government within thirty days of the receipt of application.

(4) The Government shall, on receipt of recommendation under sub-paragraph (3), within thirty days, fix the retail price of such new drug and such price shall be applicable to such applicant of such new drug.

(5) Where existing manufacturer of scheduled formulation fails to apply for prior approval of the  price  of  the  new  drug  in  Form-I,  such  manufacturer  shall  be  liable  to  deposit  the overcharged amount over and above such price fixed and notified by the Government, if any, along with interest thereon from the date of launch of the new drug, in addition to the penalty.

(6) No existing manufacturer of a scheduled formulation shall sell such a new drug at a price higher than the retail price (plus local taxes as applicable) fixed by the Government for such new drug and in case such a manufacturer is found to sell such a new drug at a price higher than  the  retail  price  (plus  local  taxes  as  applicable)  fixed  by  the  Government,  such manufacturer of the new drug shall be liable to deposit the overcharged amount along with interest from the date of overcharge, in addition to the penalty.

16.  Revision of ceiling price of scheduled formulations.-

(1) The Government shall revise the ceiling prices of scheduled formulations as per the annual wholesale price index (WPI) for preceding calendar year on or before 1st April of every year and notify the same on the 1st day of April every year.

(2) The manufacturers may increase the maximum retail price (MRP) of scheduled formulations once in a year, in the month of April, on the basis of the wholesale price index with respect to previous  calendar  year  and  no  prior  approval  of  the  Government  in  this  regard  shall  be required.

(3) Information about the revision, if carried out, shall be forwarded to the Government in either electronic or physical form in Form-II within a period of fifteen days of such revision and non-submission of information under this sub-paragraph shall be construed as non revision of maximum retail price (MRP) and the concerned manufacturer shall be liable to deposit the amount  charged  over  and  above  the  pre-revised  maximum  retail  price  (MRP),  alongwith interest thereon from the date of overcharging.

(4) In case of decline in wholesale price index, there shall be a corresponding reduction in the maximum  retail  price  and  in  case  of  scheduled  formulations  produced  or  available  in  the market before the date of notification of revised ceiling price, the manufacturers shall ensure within a period of forty-five days of the date of such notification that the maximum retail price (MRP) of such scheduled formulation does not exceed the revised ceiling price (plus local taxes as applicable) and information about the revision shall be sent to the Government in either electronic or physical form in Form-II within a period of fifteen days of such revision.

(5) Non-submission  of  information under  the sub-paragraph  (4) shall be construed  as non reduction in maximum retail price (MRP) and the concerned manufacturer shall be liable to deposit the amount charged over and above the maximum retail price revised based on decline in wholesale price index, alongwith interest thereon as overcharged amount from the date of overcharging.

17. Amendment of the list of scheduled formulation.-

(1) A decision to amend the first schedule, clearly stating the reasons thereof, shall be taken by the Government within sixty days of receipt of communication from the Ministry of Health and Family Welfare and the amendment(s) or revision, if required, in the first schedule shall be notified and thereafter, the ceiling  price(s)  for  the  medicine(s)  added  in  the  first  schedule  shall  be  fixed  as  per  the provisions of this order within  a period of sixty days from the date of the notification.

(2) The medicines omitted from the first schedule shall fall under the category of non-scheduled formulations.

18. Revision of ceiling price on the basis of moving annual turnover (MAT).-

The revision of ceiling prices on the basis of moving annual turnover value shall be carried out,-

(i) as and when the National List of Essential Medicines is revised by the Ministry of Health and Family Welfare or five years from the date of fixing the ceiling price under this Order whichever is earlier;

(ii) when the number of manufacturers of a scheduled formulation, having price of a scheduled formulation more than or equal to seventy five percent of the ceiling price fixed and notified by the Government, has decreased by twenty five percent or more than the number of manufacturers as existing on the reference date;

(iii) when the number of manufacturers of a scheduled formulation, having prices of their scheduled formulation equal to or lower than twenty five percent of the ceiling price fixed by the Government, has increased by twenty five percent or more than the number of manufacturers as existing on the reference date.

Explanation.- For the purpose of items (ii) and (iii) the “reference date” shall be for first revision of ceiling price May, 2012 and for second or subsequent revision the date of previous revision of the ceiling price.

19. Fixation of ceiling price of a drug under certain circumstances.- Notwithstanding anything contained in this order, the Government may, in case of extra-ordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any Drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the Government may allow an increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of annual wholesale price index for that year.

20. Monitoring the prices of non-scheduled formulations.-

(1) The Government shall monitor the maximum retail prices (MRP) of all the drugs, including the non-scheduled formulations and ensure that no manufacturer increases the maximum retail price of a drug more than ten percent of maximum retail price during preceding twelve months and where the increase is beyond ten percent of maximum retail price, it   shall reduce the same to the level of ten percent of maximum retail price for next twelve months.

(2) The manufacturer shall be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to the penalty.

21. Monitoring the availability of scheduled formulations.-

(1) The Government shall monitor the production and availability of scheduled formulations and the active pharmaceutical ingredients contained in the scheduled formulation and the manufacturer of scheduled formulations and the active pharmaceutical ingredients contained in the scheduled formulation shall furnish the information as stated in Form-III of schedule-II of this Order quarterly.

(2) Any manufacturer of scheduled formulation, intending to discontinue any scheduled formulation from the market shall issue a public notice and also intimate the Government in Form-IV of schedule-II of this order in this regard at least six month prior to the intended date of discontinuation and the Government may, in public interest, direct the manufacturer of the scheduled formulation to continue with required level of production or import for a period not exceeding one year, from the intended date of such discontinuation within a period of sixty days of receipt of such intimation.

22. Recovery of dues accrued under the Drugs (Prices Control) Order, 1979 and to deposit the same into the Drugs Prices Equalisation Account.-

(1) Notwithstanding anything contained in this order, the Government may by notice, require a manufacturer, importer or distributor as the case may be, to deposit the amount which has accrued under the provisions of the Drugs (Prices Control) Order, 1979 on or before the commencement of this order, into the Drugs Prices Equalisation Account and the manufacturer, importer or distributor, as the case may be, shall deposit the said amount into the said account within such time as the Government may specify in the said notice.

(2) The existing amount, if any, in the Drugs Prices Equalisation Account on or before the date of commencement of this Order, and the amount deposited under sub-paragraph (1) shall be utilised for;-

(a) paying to the manufacturer, importer or distributor, as the case may be, the shortfall between his retention price and the common selling price or, as the case may be, the pooled price for the purpose of increasing the production, or securing the equitable distribution and availability at fair prices, of drugs;

(b) meeting the expenses incurred by the Government in discharging the functions under this paragraph; and

(c) promoting higher education and research in Pharmaceutical Sciences and Technology and for the purposes incidental thereto.

23. Recovery of overcharged amount under Drugs Prices Control Orders 1987 and 1995.- Notwithstanding anything contained in this order, the Government shall by notice, require the manufacturers, importer or distributor or as the case may be, to deposit the amount accrued due to charging of prices higher than those fixed or notified by the Government under the provisions of Drugs (Prices Control) Order, 1987 and Drugs (Prices Control) Order, 1995 under the provisions of this Order.

24. Carrying into effect the price fixed or revised by the Government, its display and proof thereof.-

(1) For all the scheduled formulations having maximum retail price (MRP) higher than ceiling price (plus local taxes as applicable), the manufactures shall revise the maximum retail price (MRP) not exceeding the ceiling price (plus local taxes as applicable):

Provided that in case of scheduled formulations produced or available in the market before the date of notification of ceiling price, the manufacturers shall ensure within a period of forty-five days  of  the date  of  the  notification  that  the  maximum  retail  price  of  such  scheduled formulation does not exceed the ceiling price (plus local taxes as applicable).

(2) Every manufacturer of a schedule formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the maximum retail price of that formulation based on the ceiling price notified in the Official Gazette or ordered by the Government in this behalf with the words "Maximum Retail Price" preceding it and the words 'inclusive of all taxes' succeeding it.

(3) Every manufacturer shall issue a price list and supplementary price list, if required, in Form V to the dealers, State Drugs Controllers and the Government indicating reference to such price fixation or revision as covered by the order or Gazette notification issued by the Government, from time to time.

(4) Every retailer and dealer shall display the price list and the supplementary price list, if any, as furnished by the manufacturer, on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same.

25. Display of prices of non-scheduled formulations and price list thereof.-

(1) Every manufacturer of a non-Scheduled formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the maximum retail price of that formulation with the words "Maximum Retail Price" preceding it and the words 'inclusive of all taxes' succeeding it.

(2) Every manufacturer shall issue a price list and supplementary price list, if required, of the non-Scheduled formulations in Form-V to the dealers, State Drugs Controllers and the Government indicating changes, from time to time.

(3) Every retailer and dealer shall display the price list and the supplementary price list, if any, as furnished by the manufacturer or importer, on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same.

26. Control of sale prices of formulations.- No person shall sell any formulation to any consumer at a price exceeding the price specified in the current price list or price indicated on the label of the container or pack thereof, whichever is less.

27. Sale of split quantities of formulations.- No dealer shall sell loose quantity of any formulation at a price which exceeds the pro-rata price of the formulation.

28. Manufacturer, distributor or dealer not to refuse sale of drug.- Subject to the provisions of the Drug and Cosmetics Act, 1940 (23 of 1940) and the rules made thereunder, -

(a) no manufacturer or distributor shall withhold from sale or refuse to sell to a dealer any drug without good and sufficient reasons;

(b) no dealer shall withhold from sale or refuse to sell any drug available with him to a customer intending to purchase such drug.

29. Maintenance of records and production thereof for inspection.- Every manufacturer shall maintain records relating to the sales of individual active pharmaceutical ingredients or bulk drugs manufactured or imported and marketed by him, as the case may be, and the sales of formulations units and packs and also such other records as may be directed from time to time by the Government and the Government shall have the power to call for any record and to inspect such records at the premises of the manufacturer.

30. Power of entry, search and seizure.-

(1) Any Gazetted Officer of the Central Government or of a State Government, as the case may be, authorised by a general or special order by the Central Government or by the State Government, as the case may be, in this behalf may, with a view to securing compliance with this Order or to satisfy himself that the provision of this Order have been complied with-

(a) enter and search any place;

(b) seize any drug, alongwith the containers, packages or coverings in which the drug is found, in respect of which he suspects that any provision of this Order has been, is being, or is about to be contravened, and thereafter take all measures necessary for securing production of the drug, containers, packages or coverings, so seized, in a court of law and for their safe custody pending such production;

(c) seize any document, such as, cash memo or credit memo books, books of account and records of purchase and sale of the drugs in respect of which he suspects that any provision of this Order has been, is being, or is about to be contravened.

(2) The provisions of Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure shall, so far as may be, apply to searches and seizures under this Order.

31. Power to review.- Any person aggrieved by any notification issued or order made under paragraphs  4,  5  and  6  of  this  Order,  may  apply  to  the  Government  for  a  review  of  the notification or order within a period of thirty days of the date of publication of the notification in the Official Gazette or the receipt of the order by him, as the case may be, and the Government may make such order on the application as it may deem proper:

Provided that pending a decision by the Government on the application submitted under the above paragraph, no manufacturer shall sell a scheduled formulation or a new drug, as the case may be, at a price exceeding the ceiling price or retail price, as the case may be, fixed by the Government of which a review has been applied for.

32. Non-application of the provisions of this order in certain cases.-

The provisions of this order shall not apply to,-

(i) a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970) (product patent) and not produced elsewhere, if developed through indigenous Research and Development, for a period of five years from the date of commencement of its commercial production in the country.

(ii) a manufacturer  producing a new drug in the country by a new process developed through indigenous Research and Development and patented under the Indian Patent Act, 1970 (39 of 1970) (process patent) for a period of five years from the date of the commencement of its commercial production in the country.

(iii) a manufacturer producing a new drug involving a new delivery system developed through indigenous Research and Development for a period of five years from the date of its market approval in India:

Provided that the provision of this paragraph shall apply only when a document showing approval of such new drugs from Drugs Controller General (India) is produced before the Government.

Explanation.- Notwithstanding anything contained in this Order, for the purpose of this paragraph “new drug” shall have the same meaning as is assigned to under rule 122E of the Drugs and Cosmetics Rules, 1945;

File No.31011/17/2012-PI-II

Shambhu Kallolikar)
Joint Secretary to the Government of India

Schedule-I
(See Paragraphs-2(t),2(zb))Symbols P, S and T appearing in NLEM 2011 denote essentiality at Primary, Secondary and Tertiary levels respectively.

SCHEDULE-II FORM - I

PROFORMA FOR APPLICATION FOR PRICE FIXATION / REVISION OF A NEW DRUG FORMULATION RELATED TO NLEM FORMULATION
(See paragraphs 2(u),5,7,8,9,15)

1. Name of the formulation:

2. Name and address of the manufacturer/importer:

3. Name of the Marketing Company, if any:

4. Composition as per label claimed and approved by Drug Control Authorities:

5. Drugs Control Authority Permission Number and Date (copy to be enclosed):

6. Date of commencement of production / import:

7. Type of formulation (Tablets/ Capsules/ Syrup/ Injection/ Ointment/ Powder etc.):

8. Size of packs (10’s/ 100’s/ 1 ml/ 2 ml/ 10 ml/ 5 gms/ 10 gms etc.)

9. Therapeutic category/ use of the formulation.

10. The Retail Price  claimed for approval

11. Reason for submission of application for price fixation / revision.

12. Any other information relevant to product and its process of manufacturing/ packaging/ distribution.

The information furnished above is correct and true to the best of my knowledge and belief.

Place:

Date:

Authorised Signatory:

Name:

Designation:

SCHEDULE-II

FORM - II

PROFORMA FOR SUBMISSION OF REVISED-PRICES FOR SCHEDULED FORMULATIONS
(See paragraph 16)

1. Name and address of the manufacturer / importer / distributor.

2. Name and address of the marketing company, if any.

Notes:-  In case of purchased formulation, name of the manufacturer shall be indicated.

The information furnished above is correct and true to the best of my knowledge and belief.

Place:

Date:

Authorised Signatory:

Name:

Designation:

FORM – III

PROFORMA FOR QUARTERLY RETURN IN RESPECT OF PRODUCTION/IMPORT AND SALE OF NLEM DRUGS
(See paragraphs 21(1))

1. Name and address of the manufacturer/importer:

2. Name and address of marketing company, if any:

3. Details of production/import and sale for the Quarter of a Year:    …………………

TABLE-A

TABLE-B

Constraints, if any:

Note:-

(1) Production outsourced / carried out on job work basis should also be included.

The information furnished above is correct and true to the best of my knowledge and belief.

Place:

Date:

Authorised Signatory:

Name:

Designation:

SCHEDULE-II FORM - IV

PROFORMA FOR SUBMISSION OF THE DETAILS IN RESPECT OF DISCONTINUATION OF THE PRODUCTION AND/ OR IMPORT OF SCHEDULED FORMULATION
(See paragraphs 21(2))

1.  Name of the formulation:

2.  Name and address of the manufacturer/importer :

3.  Name of the Marketing Company, if any:

4.  Composition as per label claimed and approved by Drug Control Authorities:

5.  Drugs Control Authority Permission Number and Date (copy to be enclosed):

6.  Celling Price and date of notification:

7.  Existing maximum retail price (MRP) and its effective date:

8.  Therapeutic category as per NLEM:

9.  Date of commencement of production / import

10. Proposed date of discontinuation:

11. Reasons for discontinuation of production / import:

12. Year-wise Production/Import during the last 5 years including current year

13. Year-wise sale during the last 5 years including current year

14. Whether any new drug as defined under Proviso of Definition of “New Drug” under DPCO, 2013 has been launched or intended to be launched. If so, the details thereof:

15. Any other information relevant to discontinuation of scheduled formulation:

Place:

Date:

Authorised Signatory:

Name:

Designation:

SCHEDULE-II

FORM - V

PROFORMA FOR PRICE LIST
(See paragraphs 2(x),24,25,26)

1. Name and address of the manufacturer / importer / distributor.

2. Name and address of the marketing company, if any.

TABLE-A

TABLE-B

Notes:-  In case of purchased formulation, name of the manufacturer shall be indicated.

The information furnished above is correct and true to the best of my knowledge and belief.

Place:

Date:

Authorised Signatory:

Name:

Designation: