India: NPPA Show Cause Notice To All Manufacturers / Importers / Marketers Of Notified Medical Devices

As per new drugs price control regime i.e. Drugs (Prices control) Order, 2013 (DPCO 2013), every manufacturer (including importer/ marketer) of a scheduled drug/ non-scheduled drug is required to issue a price list and supplementary price list, if any, in Form V of Schedule II to the DPCO 2013¹, to all dealers (including retailers), State Drug Controllers, and Government/ National Pharmaceutical Pricing Authority (NPPA) indicating the name of product, composition, pack size (inclusive of applicable duties) and maximum retail price (MRP).

As per the DPCO 2013, scheduled drugs and those drugs which are specified in the First Schedule attached to the DPCO 2013 and non scheduled drugs are those drugs which are not mentioned in the said Schedule of the DPCO 2013.

So far as medical devices are concerned, the Ministry of Health and Family Welfare, Government of India vide various notifications has specified certain medical devices as 'Drugs' under Section 3(b) (iv)² of the Drugs and Cosmetics Act, 1940. The list of medical devices notified as drugs under the Drugs and Cosmetics Act, 1940 is as follows:

In addition to the above medical devices, the following products are also regulated as 'Drugs' under the Drugs and Cosmetics Act, 1940 and Rules made thereunder and the same are Blood Grouping Sera, Ligatures, Sutures and Staplers, Intra-Uterine Devices (Cu-T) (Scheduled Drug), Condoms (Scheduled Drug), Tubal Rings, Surgical Dressings, Umbilical Tapes and Blood/ Blood Component Bags.

The above medical devices have been notified as drugs under the Drugs and Cosmetics Act, 1940 and such medical devices can further be divided into two parts i.e. scheduled formulations and non scheduled formulations under the DPCO 2013.

Among other things, the manufacturers/importers of the above notified medical devices are required to issue a price list and supplementary price list, if any, in Form V of Schedule II to the DPCO 2013, to all dealers (including retailers), State Drug Controllers, and Government/ NPPA indicating the name of product, composition, pack size (inclusive of applicable duties) and maximum retail price (MRP).

It is realised by the NPPA that majority of the manufacturers (including importers and marketers) are not at all, or not regularly issuing price list/ supplementary price list in Form V of Schedule II to the DPCO 2013, to State Drug Controllers and the Government/ NPPA.

Keeping in view the above non-adherence on the part of the manufacturers/importers of the notified medical devices, the NPPA provided final opportunity vide its show cause notice on 16 February 2015 to all manufacturers/importers/marketers of notified Medical Devices (who have failed to submit Price list/ Supplementary Price list in Form V of Schedule II to the DPCO 2013) to file the relevant details.

It is also stated in the said show cause notice that if the supply is made by the wholesaler to the hospital directly, the column related to PTR (Price to Retailer) in the Form V may be left blank and in lieu of it the Price to Wholesaler (including applicable duties) may be mentioned separately as a footnote.

Conclusion:

The NPPA is empowered not only to regulate/fix the prices of scheduled formulations including notified medical devices (which have been included in the First Schedule of the DPCO 2013) but also to monitor the prices of non scheduled formulations including notified medical devices (which have not been included in the First Schedule of the DPCO 2013) to ensure that no manufacturer increases the maximum retail price of a drug more than ten percent of maximum retail price during preceding twelve months. In absence of the price list, it becomes difficult to the NPPA to regulate/fix/monitor the prices of scheduled formulation and non scheduled formulations. Therefore, the NPPA vide its above notice has directed all the manufacturers/importers of the notified medical devices to supply their price lists. Further, non submission of the price list will amount to contravention of the provisions of the Essential Commodities Act, 1955 which attracts imprisonment and fine under section 7 of the Essential Commodities Act, 1955.

Footnotes

1. paragraphs 24 and 25 of the DPCO 2013

2. Section 3 (b) (iv): Drugs includes such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board.

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