Why in the news?

• Recently, The National Pharmaceutical Pricing Authority (NPPA) has announced an annual change of 10.76% in the Wholesale Price Index (WPI), which could translate into the steepest price increases in years for over 800 scheduled drugs and medical devices in the National List of Essential Medicines (NLEM).
• Every year, the authority announces the WPI change in accordance with The Drugs (Price Control) Order, 2013, or DPCO, 2013.

What does the DPCO, 2013 say?

• The Drugs Prices Control Order is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
• As per the price control order, the NPPA is empowered to fix the ceiling price of essential medicines and medical devices — 886 in number currently.
• The order also provides for a WPI-based price change every year that pharmaceutical companies are allowed to implement.

What is NPPA and its role? 

• National Pharmaceutical Pricing Authority (NPPA), was established on 29th August 1997 as an independent body of experts as per the decision taken by the Cabinet committee in September 1994 while reviewing Drug Policy.
• Functions: The Authority, has been entrusted with the task of fixation/revision of prices of pharmaceutical products (bulk drugs and formulations), enforcement of provisions of the Drugs (Prices Control) Order and monitoring of the prices of controlled and decontrolled drugs in the country.
• It is an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals and Fertilizers as an independent Regulator for pricing of drugs and to ensure availability and accessibility of medicines at affordable prices.

Reference:

1. https://indianexpress.com/article/explained/explained-drugs-medicine-price-rise-7841214/