Profit Control: NPPA extends trade margin capping on 5 critical COVID-19 devices
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New Delhi: Through a recent gazette notification, the National Pharmaceutical Pricing Authority (NPPA), Department of Pharmaceutical, Ministry of Chemicals and Fertilizers, Government of India, has extended the trade margin capping of the 5 critical medical used in COVID management till December 31, 2022.
The 5 medical devices include Pulse Oximeter, Blood Pressure Monitoring Machine, Nebulizer, Digital Thermometer ad Glucometer.
As per the provisions of the Drug (Prices Control), Order,2013, the monitoring of the trade margin rationalization and its implementation will be done said by the authorities.
"It was decided that the notification SO 2808(E) dated July 13, 2021, be further extended up to December 31, 2022, or until further orders, whichever is earlier," said NPPA.
The drug price regulator had earlier extended the trade margin rationalization of the five medical devices- Pulse Oximeter, Blood Pressure Monitoring Machine, Nebulizer, Digital Thermometer ad Glucometer at 70 percent at the first point of sale, following the initial notification on July 13, 2022.
With respect to the above notification, Medical Dialogues Team had earlier reported about the capping of the trade margin of the above-mentioned medical devices. It was noted that the devices capped the trade margins at 70 percent.
The government had directed manufacturers to fix the Maximum Retail Price (MRP) as per the specified formula: "Maximum Retail Price = Price to Distributor (PTD) + (PTD x TM) + Applicable GST, Where TM = Trade Margin not exceeding 70%."
TMR is a mode of price regulation by way of capping trade margins in the supply chain. This is the difference between the price to trade by manufacturers and the price to patients i.e., Maximum Retail Price.
A memorandum by NPPA released on July 14, directed manufacturers and importers of these medical devices to submit the revised MRPs of their products for ensuing the price capping
The gazetted also added "It has also been decided that the same shall be monitored as per the provisions of Paragraph 20(1) of the DPCO, 2013 subject to maintenance of trade margin stipulated in Para 11 of the notification vide S.O. 2808(E) dated 13th July 2021. "
"The Notification S.O. 2808 (E) dated 13th July 2021 shall remain in force during the currency of this order." further added.
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