The National Pharmaceutical Pricing Authority
("NPPA") issued guidelines for stoppage
of scheduled formulations under paragraph 21(2) of Drug Pricing
Control Order, 2013 ("DPCO 2013"). The
Department of Pharmaceuticals ("DoP")
has clarified to the pharmaceutical industry that the DPCO 2013
does not distinguish between sales of medicines through retailer
shop or through hospital outlets while deciding the ceiling price
of a particular drug. It is only the "price to
retailer," which is taken into account for calculation of
ceiling price of a drug, the DoP clarified while disposing of a
revision petition filed by the Mumbai-based pharma major.
1. NPPA issues guidelines for stoppage of scheduled
NPPA has issued draft guidelines for the disposal of Form-IV
application under paragraph 21(2) of DPCO 2013 for discontinuation
of scheduled formulations from the market by the pharmaceutical
companies. In the draft guidelines, paragraph 21(2) provides that
any manufacturer of scheduled formulation, intending to discontinue
any scheduled formulation from the market shall
(i) issue a public notice and also
(ii) intimate the government in Form-IV of this
order in this regard at least six month prior to the intended date
of discontinuation and (iii) the government may,
in public interest, direct the manufacturer of the scheduled
formulation to continue with the required level of production or
import for a period not exceeding one year, from the intended date
of such discontinuation within a period of a 60 days of receipt of
such intimation. As per the guidelines, permission for
discontinuation may be granted by the NPPA wherever number of
market players are 10 or more and the market share of the applicant
company is <1%. Permission may also be granted by the NPPA for
gradual discontinuation and the applicant company may be advised
within a period of 60 days from the receipt of Form-IV to continue
to manufacture/import and sale the drug during the next six months,
wherever number of market players are 10 or more and the market
share of the applicant company is 1%-3%. The guidelines further say
that permission may be granted by the NPPA for gradual
discontinuation and the applicant company may be advised within a
period of 60 days from the receipt of Form-IV to continue
manufacture/import and sale the drug during the next 12 months,
wherever the number of market players are more than 5 and less than
10 and the market share of the applicant company is >3%-<5%.
The company intending to discontinue the scheduled formulation from
the market shall also issue a public notice. Permission for
discontinuation may be granted by the NPPA only after approval of
the Authority where number of market players are less than 5 and
the applicant company holds 5%/< of market share. In this
regard, an agenda note should be put up for consideration of the
Authority within one month of the receipt of Form-IV
PSA view –The proposed guidelines will
streamline the discontinuation of scheduled formulations.
2. "Price to retailer" only basis for deciding the
ceiling price of the drugs under DPCO
A Mumbai based pharma major had filed a review application with
the DoP against NPPA's fixation of ceiling prices for
Dexamethasone Injection 4mg/ml and Gentamycin 40mg/ml through its
notification S.O. No. 1157(E) dated 28.4.2014 under DPCO 2013.
Aggrieved by the notifications, the company sought review against
this price fixation orders. After thorough examination of the
issue, the DoP rejected company's plea and ordered that once
the brands/generic versions of a particular medicine, having MAT of
>1% have been identified, it is only simple averaging of prices
of all such versions, which determines ceiling price for that
medicine per Para 4 of DPCO 2013. The DPCO 2013 does not
distinguish between sales through retailer shop or through hospital
outlets. It is only the "Price to retailer", which is
captured by IMS, that is taken into account for calculation
of ceiling price. Therefore, any such further classification or
exclusion of hospital sales may not be in line with provisions of
DPCO 2013, the DoP order said.
PSA view –This order of DoP has brought
in clarity for deciding the ceiling price of the drugs.
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