The decision of the National Pharmaceutical Pricing Authority (NPPA) to withdraw the guidelines for price control on 108 drugs has been welcomed by the pharmaceutical industry.
The NPPA had capped prices of 108 formulations in cardiac and diabetes treatment in July 2014 invoking Paragraph 19 of the Drug Price Control Order (DPCO) 2013 but it had extended the price controls of these drugs which were outside the National List of Essential Medicines (NLEM). There were protests from pharmaceutical companies and bodies.
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They had contested the order in the Bombay High Court. The provision allows the NPPA “in extraordinary circumstances, if it considers necessary to do so in public interest, to fix the ceiling price or retail price of any drug for such period as it deems fit.’’
These are all non-scheduled formulations and the issue was that if the price of the brand was above the simple average price in its particular therapy group by 25 per cent or the price at which a new drug is launched at a price higher than the most expensive brand in the group, the NPPA would fix the cap.
Analysts estimated that the 108 formulations covered a market of around Rs.5,500 crore and the consequent price reduction ranged from 10 per cent to as high as 35 per cent.
“The latest move by the NPPA definitely augurs well for the industry,” S. V. Veeramani, President, Indian Drug Manufacturers’ Association (IDMA), told this correspondent.
“The biggest positive impact will be felt for companies like Sanofi (around Rs.139 crore gain), Zydus Cadila (around Rs.40 crore gain), Ranbaxy (Rs.38 crore gain). Cipla (around Rs.19 crore gain) and Sun Pharma (around Rs.25 crore gain in sales) on the basis of AIOCD AWACS,” said Sarabjit Kour Nangra, Vice President, Research, Angel Broking.
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