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Cabinet approves extension/renewal of the extant Pharmaceuticals Purchase Policy (PPP) with the same terms and conditions

The Union Cabinet chaired by Prime Minister Shri Narendra Modi today approved extension/renewal of Pharmaceuticals Purchase Policy (PPP) for pharmaceutical Central Public Sector Undertakings (CPSUs) till their closure/strategic disinvestment.

Major Impact

Extension/renewal of the policy would help the pharma CPSUs in optimum utlilization of their existing facilities, enable them to generate revenues to pay salaries to their employees, help them in keeping the costly, sophisticated machinery in running condition resulting in higher return at the time of disposal in case of CPSUs under closure and better valuation in case of CPSUs under disinvestment.

Background

Pharmaceuticals Purchase Policy (PPP) was approved by the Cabinet on 30.10.2013 for a period of five years in respect of 103 medicines manufactured by pharma CPSUs and their subsidiaries.  The policy is applicable to purchases by Central/ State Government departments and their Public Sector Undertakings etc.  The pricing of the products is done by National Pharmaceutical Pricing Authority (NPPA).  The procuring entity can purchase from Pharma CPSUs and their subsidiaries subject to their meeting Good Manufacturing Practices (GMP) norms as per Schedule ‘M’ of the Drugs & Cosmetic Rules.  The term of the policy expired on 09.12.2018.

Meanwhile, Cabinet decided on 28.12.2016 to close Indian Drugs and Pharmaceutical Limited (IDPL) & Rajasthan Drugs and Pharmaceuticals Limited (RDPL) and strategically sell Hindustan Antibiotics Limited (HAL) & Bengal Chemicals and Pharmaceutical Limited (BCPL), after meeting their liabilities from proceeds of sale of their surplus land to government agencies. Subsequently, Cabinet has modified its decision on 17.07.2019 permitting to sell surplus land as per revised Department of Public Enterprises guidelines dated 14.06.2018.  Separately, Cabinet Committee on Economic Affairs (CCEA) decided on 01.11.2017 for disinvestment of 100% GOI equity in the fifth pharma CPSU, namely Karnataka Antibiotics & Pharmaceuticals Limited (KAPL).

It has been proposed to extend the policy till final closure/sale of pharma CPSUs.