The department of pharmaceuticals on Thursday notified the Drug Price Control Order 2013 that would reduce prices of 348 essential medicines.

The new order authorises the National Pharmaceutical Pricing Authority (NPPA) to regulate prices of essential medicines as listed in the National List of Essential Medicines (NLEM) 2011.

The notification of the new order comes into effect immediately. Ceiling prices of NLEM drugs will now be fixed as per the National Pharmaceutical Pricing Policy. The policy says that the ceiling price of an essential drug will be the simple average of all brands with a market share of at least 1 per cent.

Experts say prices could go down 30-60 per cent though there could be wide variations depending on the drug. NLEM includes drugs like Paracetamol, Tramadol, Carbamazepine, Ampicillin, Amikacin, Vitamin C, oral rehydration salts, etc.

NPPP-2012 took long to finalise due to differences between ministries of health and chemicals and fertilisers. Other stakeholders, industry and NGOs had also expressed their concerns on the suggested pricing model.

At the last minute after a Group of Ministers had finalised the policy, finance ministry raised objections, and so, another meeting with the finance minister as a special invitee was necessitated.

Drugs provisions in the policy also include promotion of non-branded generic drugs and low-cost drugs by creating a well spread out low-cost pharmacy chain through the Jan Aushadhi Programme so that the last mile reach of essential drugs are accessible and affordable to every village in the country.

It also underscores the need for increasing production in drug PSUs, strengthening the drug regulatory infrastructure and rationalisation of pharma retail trade.