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Pharma firms get NPPA notice for violating pricing norms for combination drugs

LiveMint logoLiveMint 17-05-2017 Isha Trivedi

Mumbai: Drug pricing regulator, the National Pharmaceutical Pricing Authority (NPPA), has issued a notice to pharmaceutical companies that have launched combination drugs without taking its prior approval, in violation of the Drug Price Control Order (DPCO).

“Some pharmaceutical companies have launched formulations by altering a scheduled formulation, with strength other than as specified in DPCO 2013 and/or in combination with other non-scheduled medicines without even applying for price approval from NPPA as required,” the regulator said in the notice posted on its website.

In total, 201 combination drugs have been launched without NPPA approval since 2013 by 66 pharma companies, including Abbott Healthcare Ltd, Alkem Laboratories Ltd, Cadila Healthcare Ltd, Eris Lifesciences Pvt. Ltd, Glenmark Pharmaceuticals Ltd, Lupin Ltd, Sanofi India Ltd, Sun Pharmaceutical Industries Ltd and Wockhardt Ltd.

NPPA also said it is unclear whether these drugs have approval from the Central Drugs Standard Control Organisation (CDSCO) or whether they are rational or irrational drugs, considering that many of them are fixed-dose combination drugs. NPPA has asked the firms to submit batch-wise production and sales details, and maximum retail price of these drugs from the date of launch, along with reasons for non-compliance with norms by 15 June.

As per DPCO provisions, companies are liable to deposit overcharged amount for these drugs with interest from the date of launch, along with penalty.

According to NPPA’s guidelines on overpricing of drugs, if a company does not respond to a show-cause notice regarding overcharging of a drug, the regulator, after issuing one reminder and giving 15 days to the company, shall fix the price of the medicine and calculate the overcharged amount based on the difference between its price and the maximum retail price. The company will also have to pay a penalty, not less than 100% of the principal amount.

According to D.G. Shah, secretary general of lobby group Indian Pharmaceutical Alliance, NPPA had rejected 135 applications for launching combination drugs, which contained at least one molecule that is under price control, during the 12-month period ended August 2015.

Only the new brands launched by companies post DPCO 2013 have to take prior approval from NPPA, which gives an edge to companies that have been marketing the same combination drugs before 2013, as they do not have to undergo such price scan.

“By rejecting the price approvals, the price regulator has not only protected the existing formulators from new entrants but also abetted monopoly of some of the existing formulators, who enjoy up to 99% market share of these products,” Shah said.

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