DPCO, short for Drug Price Control Order, is a government-approved order under the “Essential Commodities Act” which aims to regulate the price of medicines and drugs. In other words, this order allows the Indian government to fix the cost of some fundamental bulk drugs and their formulations.
The order also includes the list of drugs and medicines along with their prices particularly fixed by the government of India under Sec. 3 of Essential Commodities Act, 1955.
This control over price order was first introduced in the 1970s by the Indian government which put limits on the profitability of pharmaceutical firms.
That’s not all!
Keep reading the article to know the objective, need, and importance of the Drug Price Control Order (DPCO) Act.
Objective Of DPCO
With a high need for providing medicines to everyone at reasonable prices, the government introduced the Drug Price Control Order (DPCO) Act. The main objective of DPCO is to ensure the availability of high-quality essential medicines at budget-friendly prices. This further guarantees that everyone can access essential and life-saving drugs without breaking the bank.
Some other goals of this drug policy are:
- Ensuring that the superior quality of essential and life-saving drugs are available in abundance at cost-effective rates.
- Prioritizing quality over quantity.
- Encouraging the rational use of drugs nationwide.
- Introducing new technologies and drugs in the pharma world.
- Increasing the production rate of drugs.
An Overview Of Essential Medicines
As already mentioned above, the main motive of DPCO is to provide essential medicines at the lowest prices. But what are exactly essential medicines?
Essential medicines are the necessary drugs that cater for the health care needs of the people. The term “Essential Medicines” was first coined by WHO in 1977. Listed below are some points that categorize a drug as an essential medicine:
- Disease prevalence
- Public health relevance
- Evidence of efficacy and safety
- Comparative cost-effectiveness
Features of Essential Medicines
- Essential medicines must be 24/7 available within the context of functioning health systems in sufficient quantity.
- Essential medicines must be available in suitable dosages.
- Essential medicines must be made in compliance with the highest standards of quality.
- Essential medicines must be available for everyone, including individuals and healthcare communities at a fair price.
As already stated above, Drug Price Control Order (DPCO) underlines the importance to rationalize the use of essential medicines. Some of the vital steps that government can take include
- Impose clinical policies in the pharma industry.
- Promote drug committees in districts and hospitals.
- Supervise, audit, and feedback.
- Aware public of medicines.
- Utilize adequate resources like money and time to make sure that the medicines and healthcare staff are always available.
Why Drug Price Control Order (DPCO) Came Into Effect?
In the past years, many pharmaceutical companies increased their product prices to gain maximum revenue and profit. Apart from that, some of the other reasons for the hike in drug prices include
- High cost of bulk drugs.
- High cost of products or ingredients like sugar, glycerine, and solvent that are used to develop medicines.
- Hike in the transport and freight prices.
- Increase in the cost of utilities like fuel and power.
- Changes in taxes and duties
Whatever may be the reasons, not every individual can afford to pay for expensive medicines, thus affecting their overall well-being. Pharma companies selling products at high rates which should be affordable to users became a point of concern for the government. This is when the government took action and introduced the Drug Price Control Order act which regulates the price of essential drugs.
Importance Of DPCO
India is known as the branded generic market. This means that patients are often prescribed the medicine of a particular brand rather than the underlying formulation. Needless to say, there are many brands that sell medicines at affordable prices. However, in most cases, doctors prescribe medicines from well-known brands which are highly priced.
Patients who can’t afford expensive medicines or are unaware of cheaper alternatives, opt for low-price equivalents of the expensive drug brands prescribed by their physicians. Moreover, due to the lack of knowledge, patients are unaware of other substitutes available at an economical price point. This is when the government felt the need to intervene and introduced DPCO to make essential drugs accessible to the needy at cheap prices.
Who Controls The Price Of Drugs In India?
In India, the price of essential drugs and medicines is regulated and managed by the National Pharmaceutical Pricing Authority (NPPA). NPPA is an independent government organization linked with the Department of Pharmaceuticals (DoP), Ministry of Chemicals and Fertilizers that aims to control drug pricing in India. NPPA is responsible for implementing all provisions under DPCO.
Let’s Wrap Up
Hopefully, now you are well aware of the Drug Price Control Order (DPCO) act. Overall, the order allows the government to define a ceiling price (fixed price) for essential and life-saving drugs, making them affordable for everyone, including individuals and communities.
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