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NPPA addresses the issue of inter brand price variation in new scheduled drugs while fixing ceiling prices
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Gireesh Babu, New Delhi
February 13 , 2023
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The National Pharmaceutical Pricing Authority (NPPA) has decided to cap the prices of new scheduled drugs from the same company with significant inter-brand price variation, at the price of the lowest brand or pack size plus 10 percent based on the existing reference under the Drugs (Prices Control) Order (DPCO), 2013.
The NPPA has released the National List of Essential Medicines (NLEM), 2022, with a total of 384 medicines of which 34 are new medicines added to the list while 26 from the previous list were deleted due to various reasons.
It has also started revising the ceiling prices of the formulations which were retained in the NLEM, 2022 and for those which were added afresh in the new list, after revising the Schedule I of the DPCO, 2013, with the new list of essential medicines.
While fixing the prices, the Authority observed that when it comes to the formulations included in the NLEM 2022 for the first time, changing the non-scheduled formulations to scheduled formulations, there is large inter-brand variation in the prices in some of the formulations of the same company.
The Authority deliberated on the issue in its recent meeting and decided to address the price variation while fixing the prices of these formulations according to the revised Schedule I of the DPCO, 2013.
It has decided that the Price to Retailer (PTR) of various brands or pack sizes of a formulation of one company may be capped at price of the lowest brand or pack size plus 10 percent based on an existing reference under DPCO, 2013. It also decided that the price of such formulations may be fixed under Para 19 of the DPCO, 2013 in public interest,
According to Para 19 of the price control order, notwithstanding anything contained in the order, the government may, in case of extraordinary circumstances, in public interest, fix the ceiling price or retail price of any drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the government may allow an increase or decrease in the ceiling price or the retail price, irrespective of annual wholesale price index (WPI) for that year.
“The annual price increase on such formulations may be allowed as per para 16 of DPCO, 2013 on the basis of WPI similar to other schedule formulations for which price is fixed under Para 4 and 6 of DPCO, 2013,” said the Authority. The Para 16 of the price control order is related to the revision of ceiling price of scheduled formulation, on or before April 1 of every year as per the annual WPI for preceding calendar year and related matters.
The NPPA, in its latest lot of draft ceiling price calculation sheets released, has calculated the price of certain brands of scheduled formulations, based on its decision to address the issue of interbrand price variation. For instance, two different brands of the same formulation by a company have two different prices, at Rs 7.86 per unit for one brand and Rs 11.07 per unit for another one. The NPPA, while considering these brands for ceiling price fixation of the new drug, itraconazole 100 mg, considered the price of the formulation with Rs. 11.07 per unit as Rs. 8.65 per unit.
Similarly, for two brands from the same company for the formulation teneligliptin 20 mg, the prices varied from Rs. 7.75 per unit and Rs. 9.81 per unit. The NPPA has calculated and considered the price of the brand with Rs. 9.81 per unit price at Rs. 8.53 per unit, for the purpose of ceiling price fixation.
The Authority on February 9, released the 11th lot of draft version of calculation of ceiling price for 50 formulations under revised Schedule I of DPCO, 2013.
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