In quoting the price of goods for international sale, a contract may include specific elements affecting the price, such as credit, sales terms, and transportation. Parties to the transaction must be certain that the quotation settled on appropriately locate responsibility for the goods during transportation and spells out who pays transportation charges and from what point. Price quotations must also specify the currency to be used, credit terms, and the type of documentation required. Finally, the price quotation and contract should define quantity and quality. A quantity definition might be necessary because different countries use different units of measurement. In specifying a ton, for example the contract should identify it as a metric or an English ton, and as a long or short ton. Quality specifications can also be misunderstood if not completely spelled out. Furthermore there should be complete agreement on quality standards to be used in evaluating the product. For example customary merchantable quality may be clearly understood among US customers but have a completely different interpretation in another country. The international trader must review all terms of the contact; failure to do so may have the effect of modifying prices even though such a change was not intended.
Drug Pricing in India:
The National pharmaceutical authority (NPPA), was established on 29th August 1997 as an independent body of experts as per the decision taken by the Cabinet committee in September 1994 while reviewing the drug policy. The Authority interalia, has been entrusted that task of fixation / revision of prices of pharmaceutical product (bulk drugs and formulations) enforcement of provisions of the Drugs (Price control) Order and monitoring of the prices of controlled and decontrolled drugs in the country.
The main duty policy of Government of India is:
1) Ensuring abundant availability at reasonable prices of essential and life savings and prophylactic medicines of good quality.
2) Strengthening the system of quality control over drug production and promoting the rational use of drugs in the country.
3) Creating an environment conducive to channelizing new investment into the pharmaceuticals industry with a view to encourage cost effective production with economic sizes and introducing new technologies and new drugs.
4) And strengthening the indigenous capability for production of drugs.
As in year 2006, 74 out of the about 500 commonly used bulk drugs are kept under statutory price control. All formulations containing these bulk drugs either singly and in combination fall under price controlled category. However, the prices of other drugs can be regulated if warranted in public interest. NPPA fixes two types of prices viz., ceiling prices and non ceiling prices for medicines in the controlled category.
In the case of that bulk drug, which under price control a single maximum selling price is fixed that is applicable throughout the country. This is called the Ceiling Price of that drug.
To achieve uniformity in prices of widely used formulations the modifications in drug policy envisage that there should be ceiling prices for commonly marketed standard pack sizes of price controlled formulation which would be obligatory for all including small scale units, to follow. Powers under para 9 of DPCO, 1995 are exercised for fixation / revision of ceiling prices. The ceiling price fixed / revised by NPPA are notified in the Gazette of India (Extraordinary) from time to time. The ceiling prices are usually notified as exclusive of excise duty local tax etc.
Non ceilings prices fixed by NPPA under parts para 8(1), (2) (4) and part 11 of DPCO, 1995 are specific to a particular pack size of scheduled formulations of a particular company. Hence they are formulation specific and company specific. The prices fixed for non ceiling packs are communicated to the respective firms by issuing office orders. In such an order, usually the excise duty element is shown separately. However, local taxes are not included in the Non ceiling price.
Source: International Marketing