Several medical devices companies have recently received an official letter (“Letter”) from the National Pharmaceutical Pricing authority (“NPPA”) directing them to register on the Integrated Pharmaceutical Database Management System (“IPDMS”) portal and file applicable forms under the Drugs (Prices Control) Order, 2013 (“DPCO”) within 15 (fifteen) days of issue of the Letter.
In this article, we have explained the legal background to these Letters, the consequences of non-compliance with NPPA directions, and the common issues faced by industry while complying with these requirements.
What is IPDMS?
IPDMS is an online platform developed by the NPPA to enable importers, manufacturers and marketers of drugs and medical devices to submit product pricing and related data in accordance with the requirements of the DPCO.
The pricing data submitted to NPPA through the IPDMS forms the basis for monitoring and enforcement activities carried out by NPPA against importers, manufacturers and marketers of medical devices under the DPCO.
Powers of NPPA to direct submission of product pricing and related data
Paragraph 29 of the DPCO mandates importers, manufacturers and marketers of medical devices to maintain such records as may be directed by the NPPA, including sale records, and empowers NPPA to call for and inspect such records at the premises of the manufacturer, importer and marketer of medical devices. Paragraph 30 of DPCO, empowers NPPA to enter and search any place, seize any medical device and records of purchase or sale of medical device.
The Letter has been issued in exercise of powers to call for records under Paragraph 29 and 30 of DPCO read with the Essential Commodities Act, 1955.
Consequences of non-compliance
Failure to comply with directions issued by NPPA may trigger enforcement actions under paragraphs 29 and 30 of the DPCO.
More critically, non-compliance has serious personal liability implications. Under Section 7(1)(a) of the Essential Commodities Act, any contravention of orders issued under Section 3 of the Act, including the DPCO, constitutes a criminal offence. In such cases, directors, key managerial personnel, and individuals responsible for the conduct of the business of the company may be proceeded against and can face severe penal consequences, including imprisonment and substantial fines.
It is important for company leadership to recognise that non-compliance with NPPA directions is not a routine regulatory lapse, but a matter that can expose senior management and directors to potential criminal prosecution.
How to ensure compliance of directions issued by NPPA under the Letter?
As indicated above, medical device companies that have received the Letter are required to undertake mandatory registration on the IPDMS portal and to file the applicable forms as prescribed under the DPCO within 15 (fifteen) days of the date of issue of the Letter. From compliance perspective, the companies receiving the Letter are required to undertake the following actions:
a) Registration of the company (corporate entity)
b) Registration of manufacturing plants (foreign and / or domestic)
c) Registration of products (medical devices and their model numbers)
d) Filing of applicable forms on the IPDMS portal, as directed by NPPA.
These requirements apply regardless of whether the devices are presently subject to price control (scheduled formulations) or are only covered under price monitoring (non-scheduled formulations) provisions.
Key concerns faced by medical devices companies:
Medical device manufacturers, importers, and marketers are currently grappling with several practical challenges while implementing DPCO compliance, including the following:
- Uncertainty on the applicability of DPCO to medical devices intended for institutional sale.
- Retrospective exposure concerns, as NPPA communications often require submission of historical pricing and sales data, potentially triggering past non-compliance scrutiny.
- Challenges in maintaining prices due to volatile raw material and import costs.
- Complexity in price reporting arising from differential pricing across distributors and supply chains.
- MRP declaration on package despite the package being intended for institutional sale (not invoiced to end users)
- Multiple model numbers for a single product, resulting in lengthy product lines and bulky data uploads on the IPDMS portal.
These operational issues underscore the need for a structured internal compliance mechanism and careful regulatory assessment.
Conclusion
Compliance with the provisions of DPCO and the directions issued by the NPPA is mandatory for all medical device importers, manufacturers, and marketers operating in India. Companies must urgently assess their DPCO applicability, ensure timely registration on the IPDMS portal, and file the prescribed forms in accordance with regulatory requirements. Failure to do so may result in regulatory scrutiny, potential financial exposure, and personal liability for directors and senior management under the provisions of DPCO and the Essential Commodities Act.
Disclaimer: This article is intended for general information purposes only and does not constitute legal advice.