FOPE opposes proposed exemption of retailers, hospitals from DPCO overcharging liability

The Federation of Pharma Entrepreneurs (FOPE) has urged the National Pharmaceutical Pricing Authority (NPPA) to reconsider a reported proposal to exempt retailers, hospitals, nursing homes and other downstream sellers from liability for overcharging consumers under Para 26 of the Drugs (Prices Control) Order (DPCO), 2013.

In its representation to the NPPA, FOPE said it fully supports the government’s objective of preventing overcharging and protecting patients, but argued that regulatory responsibility should rest with the stakeholder who has control over the transaction in question.

FOPE pointed out that Para 26 of the DPCO states that “no person” shall sell a formulation to a consumer above the permissible price, and therefore, in its view, the provision is not intended to place responsibility exclusively on manufacturers.

The organisation argued that while manufacturers are responsible for correctly declaring the MRP, complying with NPPA price notifications and submitting prescribed price information through the Integrated Pharmaceutical Database Management System (IPDMS), the actual transaction with the consumer is controlled by the retailer, hospital, nursing home or other downstream seller.

“The party having control over the act should bear responsibility for that act. A manufacturer should not be made liable for an independent downstream transaction merely because it manufactured the product,” FOPE said in its representation.

FOPE seeks equal accountability across the supply chain

According to FOPE, the existing DPCO already distributes responsibilities across different stages of the pharmaceutical supply chain. Paras 14, 24 and 25 deal with manufacturers’ pricing and price communication obligations, while Para 26 addresses the actual sale of formulations to consumers.

The organisation has therefore opposed what it described as a potentially disproportionate transfer of liability to manufacturers, particularly where a manufacturer has fulfilled all statutory requirements but a downstream seller subsequently charges a consumer more than the permissible price.

FOPE also cautioned that making manufacturers solely liable could expose compliant companies to unnecessary complaints, disputes and potential misuse of the regulatory mechanism.

Calls for greater use of NPPA’s digital systems

Rather than amending the liability framework, FOPE has proposed greater use of the NPPA’s PHARMA SAHI DAAM (PSD) app to establish transparency on applicable medicine prices.

It has suggested that the PSD system should be updated as soon as manufacturers submit the relevant forms through IPDMS. Once the applicable price is reflected in the NPPA system, FOPE believes the manufacturer should not remain liable for subsequent transactions beyond its control.

The organisation has also proposed that revised prices should become applicable from the next production batch, which it says could provide greater clarity and support the government’s Ease of Doing Business objective.

FOPE has requested the NPPA to consider its representation and grant the organisation a personal hearing before finalising any amendment, notification, guideline or other regulatory measure concerning liability for overcharging.

The broader issue, according to FOPE, is how to balance patient protection with a fair allocation of regulatory responsibility across India’s pharmaceutical supply chain. The organisation maintains that all stakeholders—from manufacturers and distributors to retailers, hospitals and other sellers—should be accountable for complying with the prices fixed under the DPCO.