The Union Cabinet today gave its approval to the following proposals in regard to preferential purchase policy for 102 drugs / pharmaceuticals exclusively from Pharma CPSUs and their subsidiaries by Central Departments, PSUs, autonomous bodies:
i) Purchase Preference Policy (PPP) in respect of a maximum of 102 medicines would be valid for a period of five years.
ii) This would also be applicable to purchase of 102 drugs made by State Governments under healthy programmes which are funded by Government of India.
iii) PPP will extend only to Pharma CPSEs and their subsidiaries ( ie. Where Pharma CPSEs own 51% or above shareholding).
iv) It would be applicable to maximum of 102 medicines as notified by Department of Chemicals & Petrochemicals from time to time.
v) The Purchasing Departments / PSUs / autonomous bodies etc. may invite limited tenders from Pharma CPSEs and their subsidiaries or purchase directly from them at NPPA certified / notified price with a discount upto 35%.
vi) The purchasing departments would purchase from Pharma CPSEs and their subsidiaries subject to their meeting Good Manufacturing Practices (GMP) norms as per Schedule ‘M’ of the Drugs & Cosmetic Rules. If no Pharma CPSE is forthcoming to supply these 102 medicines, the purchasing departments would be at liberty to purchase from other manufacturers.
vii) If the Pharma CPSEs or their subsidiaries which has the benefit of PPP, fail to perform as per the purchase order, it would be subject to payment of liquidated damages or any other penalty included in the contract.
viii) The medicines covered under Drug & Price Control Order (DPCO) would be supplied at the rates fixed by National Pharmaceuticals Pricing Authority (NPPA) rates minus discount up to 35 per cent.
ix) In case of medicines not covered under DPCO, prices would be certified from NPPA, only for the limited purpose of supply to Central Government Departments and their Public Sector Undertakings, autonomous bodies etc. On the certified price, Pharma CPSEs and their subsidiaries would provide discount upto 35%.
x) Pharma CPSEs and their subsidiaries would strengthen their marketing capabilities for a larger market share in the open market during the currency of Purchase Preference Policy.
The existing annual Pharma market in the country is in the range of approximately Rs. 50,000 crores ( including exports of approximately Rs. 17,000 crores). Out of this, total purchases of Central Government Department [CGHS, Defence, Railways, ESIC, National Rural Health Mission (NRHM), National Aids Control Organization (NACO) etc. ] are estimated to be approximately Rs. 2,000 crores. While purchases of State Governments account for another Rs.1,500 – 2,000 crores per annum for their health programmes. The Pharma CPSEs can supply medicines to Government and its organizations at NPPA certified / notified rates with a discount upto 35 per cent.
The decision of the Cabinet will help Government Institutions in making available quality drugs to the beneficiaries under various Health Schemes. It will also help in optimum utilization of assets of PSUs created with public funds.
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YSR/DS/HS/LV