Dpco
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This document discusses drug pricing in India under the Drug Price Control Order (DPCO) 2013. It provides information on the objectives of DPCO, key aspects of the 2013 order such as the 348 drugs brought under price control and reduced margins for wholesalers and retailers. The document also discusses how prices are calculated for scheduled, non-scheduled and new drugs/formulations. It includes a case study on the pricing of Cefixime 200mg tablets and Ondansetron HCL injection based on cost calculations.
Dpco
- 1. pricing of pharmaceutical formulation in India DPCO 2013 and case study of costing two pharmaceutical formulation by Rohan Pal B.Pharm, 4th year, 7th semester Under the guidance of Dr. Jayanta Chattopadhyay
- 2. INDEX What is DPCO Objective DPCO 2013 Pricing of SCHEDULE Formulation Pricing of NON-SCHEDULE Formulation Calculation of retail price of formulation Case study of Pricing of Cefixime 200 mg tablet and Ondansetron HCL injection (2mg/ml)
- 3. DPCO The drug price control order (DPCO) is an order issued by the government under the Essential Commodities Act which enables it to fix the prices of some essential bulk drugs and their formulations. The origin of this control dates back to 1970 when for the first time the government placed limits on profitability of pharmaceutical companies.
- 4. Objective of DPCO • To ensure availability, at reasonable prices of essential and life saving and prophylactic medicines of good quality. • Promoting the rational use of drugs in the country To encourage cost-effective production with economic sizes
- 5. DPCO 2013 The government has notified the DPCO 2013 under the Essential Commodities Act, 1955, which will give power to the NPPA to regulate prices of 348 essential drugs along with their specified strengths and dosages under NLEM 2011. Main Features of the DPCO 2013 1)The new order will bring 348 drugs & their 652 formulations under price control. 2)The new policy uses a market-based pricing mechanism against the earlier proposed cost-plus method. The ceiling price would be calculated by taking the simple average of prices of all brands of a drug with a market share of 1% or more.
- 6. 3) Margins of wholesalers & retailers have been cut down to 8% & 16% respectively. 4) Monitoring the M.R.P of Non-Scheduled formulation. 5) Control over Bulk Drug manufacturer. 6) Control over Formulation manufacturer 7) Drug producers will be permitted an annual increase in the retail price in sync with the wholesale price index.
- 7. Scheduled Formultion • Scheduled formulation shall mean Formulation with Same strength and Same dosage form as in the schedule. • If Dosage Form & Strength of a scheduled formulation are changed, it ceases to be a Scheduled Drugs • Example. • Amoxicillin Capsules 250mg is covered under schedule • Amoxicillin Tablet 125mg shall not be called a Scheduled Drug
- 8. Non - Scheduled Formulation • "Non-Scheduled Formulation" means a formulation, containing the molecule, the dosage and strengths of which are not specified in the First Schedule; (Non- NLEM Drug / Formulation) • Example: Aceclofenac,Norfloxocin, Rabeprazole
- 9. New Drug / New Formulation • A). NLEM (National List of Essential Medicines) Formulations with same specified dosage and strength as combined with another NLEM Formulations with same specified dosage and strength. • Example 1: • Paracetamol 500mg Tablet is Scheduled Formulation • Diclofenac 50mg Tablet is Scheduled Formulation • New Drug = Paracetamol 500mg + Diclofenac 50mg Tablet is New Drug/Formulation
- 10. B) NLEM Formulations with same specified dosage and strength as combined with another Non - NLEM Formulations • Example 1: • Paracetamol 500mg Tablet is Scheduled Formulation • Aceclofenac 100mg Tablet is Non - Scheduled Formulation • Paracetamol 500mg + Aceclofenac 100mg Tablet is New Drug
- 11. C) NLEM Formulations by changing its strength • Example 1: • Paracetamole 500mg Tablet is a Scheduled Drug • Paracetamole 325mg Tablet is a New Drug D) NLEM Formulations by changing its dosage • Example 1: • Diclofenac 50mg Tablet is a Scheduled Drug. • Diclofenac 50mg Ointment is a New Drug.
- 12. Not New Drug • Example 1: • Paracetamole 500mg is Scheduled Drug • Aceclofenac 100mg is not Scheduled Drug • Paracetamole 325mg + Aceclofenac 100mg is not Scheduled Drug and is not a New Drug under DPCO for price approval
- 13. PRICING OF SCHEDULED FORMULATION 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) / (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.)
- 14. • 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 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.
- 15. 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
- 16. Calculation of retail price of formulation • The retail price of a formulation shall be calculated by the Government in accordance with the following formula namely: • R.P. = (M.C. + C.C. + P.M. + P.C.) x (1 + MAPE/100) + ED. where"R.P." means retail price; • "M.C." means material cost and includes the cost of drugs and other pharmaceutical aids used. • "C.C." means conversion cost worked out in accordance with established procedures
- 17. • "P.M." means cost of the packing material used in the packing of formulation, including process loss. • "P.C." means packing charges worked out in accordance with established procedures of costing. • "MAPE" (Maximum Allowable Post-manufacturing Expenses) means all costs incurred by a manufacturer from the stage of ex-factory cost to retailing and includes trade margin and margin for the manufacturer and it shall not exceed one hundred per cent for indigenously manufactured Scheduled formulations; • "E.D." means excise duty: Provided that in the case of an imported formulation.
- 18. Case study of Pricing of Cefixime 200 mg tablet and Ondansetron HCL injection (2mg/ml)
- 19. ANNEXURE PRODUCT NAME : Cefixime Trihydrate GENERIC NAME : CEFIXIME TRIHYDRATE Tablets USP 200 mg BATCH SIZE : 1,00,000 tablets ASSAY (LIMIT) – (90-115)% 10X10 blister 0 CONVERSION RM AS PER DPCO COATED TABLET UPTO 101 MG TO 350 MG Rs. 19.45 FOR 1000 NOS 0.19 CONVERSION PM AS PER DPCO TABLET UPTO 10 NOS 0.19 0.19 PROCESS LOSS RM AS PER DPCO COATED TABLET 3.16% LOSS 0.63 PROCESS LOSS PM AS PER DPCO COATED TABLET 2.20% LOSS 0.06 QC CHARGES 0.20 TOTAL COST 23.84 SL. NO. MATERIALS (API – IAPI) P. Ref UNIT QUANTITY100% Basis RATE VALUE RATE/10 WITHOUT TAX Basic Freight Total 1 Cefixime Trihydrate USP Kg 23.2 8200.000 20.000 8220.00 190704.00 2 Microcrystalline cellulose(PH102) IP Kg 5.16 150.000 150.00 774.00 3 Purified Talc IP Kg 0.8 35.000 30.00 28.00 4 Magnesium Stearate IP Kg 0.33 130.000 130.00 42.90 5 Cross carmelose sodium IP Kg 1.600 300.000 300.00 480.00 6 ICS 223 IP Kg 1.000 1800.000 1800.00 1800.00 7 Isopropyl Alcohol IP IP Kg 13.560 120.000 120.00 1627.00 8 Dichloromethane IP IP Kg 23.400 160.000 160.00 3744.00 9 Titanium Dioxide IP Kg 0.066 550.000 550.00 36.30 199236.40 19.92 PACKING MATERIALS 1 Printed Alu Foil 112 mm Kg 12.1 290.00 290.00 3509.00 2 Plain Alu Foil 112 mm Kg 12.1 270.00 270.00 3267.00 3 Mono Cartons Pcs 10000 1.40 1.40 14000.00 4 Ptd Cartons (10 X 10) Pcs 1000 5.00 5.00 5000.00 5 Rubber Stereo Pcs 8 26.00 26.00 208.00 6 7 Ply Shipper Pcs 10 45.00 45.00 450.00 7 2” BOPP Tape Roll 1 30.00 30.00 30.00 26464.00 2.65 22.57
- 20. PRODUCT NAME : ONDENSETRON HCL INJECTION I.P. 2mg/ml, 2ml Ampoule BATCH SIZE : 180 Lts/85700 Ampoules ASSAY (LIMIT) – (90-115)% 50X2 ml SL. NO. MATERIALS (API – IAPI) P. Ref UNIT QUANTITY100% Basis RATE RATE PER AMPOULE Basic Freight Total VALUE 1 Ondensetron HCL IP Kg 0.474 9500.000 20.000 9520.00 4516.29 2 Sodium Chloride IP IP Kg 1.494 450.000 450.00 672.30 3 Citric Acid IP IP Kg 0.079 470.000 470.00 37.27 4 Tri sodium Citrate IP IP Kg 0.059 700.000 700.00 41.58 5267.44 0.06 CONVERSION RM AS PER DPCO PER AMPOULE Rs. 54.16 FOR 100 NOS UPTO 2 ML 0.54 CONVERSION PM AS PER DPCO PER AMPOULES Rs. 0.33 UPTO 5ML 0.33 PROCESS LOSS RM AS PER DPCO APOULE 10.49% LOSS 0.01 PROCESS LOSS PM AS PER DPCO AMPOULE 4.50% LOSS 0.04 QC CHARGES 0.25 TOTAL COST 2.13 PACKING MATERIALS 1 2 ml Clear Glass Ampoules (good quality) Pcs 85,700 0.50 0.50 42850.00 2 Ampoule Label Pcs 85,700 0.10 0.10 8570.00 3 Ampoule Tray (1 X 10) Pcs 8,570 1.80 1.80 15429.00 4 Ptd Box Pcs 1,714 4.50 4.50 7713.00 5 7Ply C.B Pcs 60 40.00 40.00 2400.00 7695900 0.90 0.96
- 21. CONCLUSION • The cost of cefixime 200 mg tablet is Rs. 23.84 and if we consider MAPE as 100%,the basic price becomes Rs. 47.56 + 47.56 X 6.18%(E.D.)= Rs. 50.49 • AS PER NPPA NOTIFICATION CEFIXIME 200 MG PRICE IS 112.50 • The cost of Ondansetron HCL injection is Rs. 2.13 and if we consider MAPE as 100%,the price becomes Rs. 4.26 + 4.26 X 6.18% (E.D.)= Rs. 4.52 • AS PER NPPA NOTIFICATION ONDANSETRON(2MG/ML) 1 ML PRICE IS RS 7.37
- 22. REFERENCES • National List of Essential Medicines of India 2014 • Drug Price Control India(DPCO),2013 • The Gazette of India, extraordinary , part II, section 3,sub-section(ii) dated 15th May 2013 • CENVAT Credit Rules , 2004 • Innovation and Marketing in the Pharmaceutical Industry by Eliashberg , Ding.