India: NPPA Releases Guideline For Examination Of ‘New Drugs' Launch Cases Without Obtaining Prior Price Approval

The National Pharmaceutical Pricing Authority (NPPA) in continuation with its previous Office Memorandum dated 17.05.2017 and 26.05.201725, which directed all Pharma companies and Pharma associations regarding violations of various provisions under DPCO, 2013 (including cases of New Drugs launch without obtaining prior price approval, and violation of ceiling price fixed by NPPA); has further requested all Pharma companies to submit the reasons for such violations and complete their database of IPDMS (Integrated Pharmaceutical Database Management System) at the earliest.

The cases of violations have been listed out based on the examination and analysis of market data provided by Pharmatrac. However, during the course of examination of replies submitted by various Pharma companies, it has been observed that the companies have not submitted the requisite document(s) to support their contention.

In order to bring clarity in the examination of cases of new drugs launch "without prior price approvals" (WPA) and standardization of documents to be submitted by the companies, NPPA has decided to follow a standard and uniform procedure, as described in the following guidelines:

  • WPA cases will be dropped in the following cases and the Company will be duly informed, if:

    1. The Company produces evidence (license issued by State Drugs Controller (SDC)/ Drugs Controller General (India) (DCG(I)) and invoices and samples prior to 15th May 2013, certified by Chartered Accountant (CA) / Cost Accountant (CMA) in support of the claim that the formulation was launched before the DPCO 2013 came into effect;
    2. AIOCD-Pharmatrac data confirm that the formulation was launched prior to 15th May 2013.
    3. The company claims and produces sufficient evidence to support the claim that the formulation does not come under the definition of a "new drug" under paragraphs 2 (u) of the DPCO, 2013, i.e.,

      1. Either the Company is not an "existing manufacturer" of the scheduled formulation; or
      2. None of the components of the formulation is under Schedule I of the DPCO, 2013 as amended from time to time.
    4. The Company claims are duly supported with sufficient evidence i.e. samples and invoices that the formulation is a scheduled formulation and the ceiling price is complied therewith and followed in accordance with provisions of the DPCO, 2013.
    5. The Company's claim that the formulation was never manufactured/ marketed by it, is confirmed by AIOCD-Pharmatrac.
    6. The Company has changed only the pack size and launched the new pack size

      1. At a price equal to or less than the pro rata price of the previous pack size, or
      2. The increase in pro rata price, if any, undertaken by the company is in conformity with the provisions of paragraphs 20 (1) of DPCO, 2013.
      The Company will be required to submit evidence (license issued by SDC/DCG(1), invoice and sample, duly certified by CA/CMA regarding the previous and the existing pack size of concerned formulation manufactured / marketed by it.
    7. The Company has launched a new brand having same composition as an earlier brand, merely with a different brand name

      1. At the price equal to or less than that of the earlier brand, or
      2. The increase in price effected by the company is in conformity with the provisions of paragraph 20 (1) of DPCO 2013.
      The Company will be required to submit evidence (license issued by SDC/DCG (I) and invoice and sample, duly certified by CA/CMA regarding the previous and the existing brand of concerned formulation manufactured / marketed by it.
    8. In cases where the brand has been procured/re-launched under a different name by another Company post-DPCO 2013, keeping the same composition of the formulation concerned as in the earlier brand

      1. At a price equal to or less than that of the earlier brand, or
      2. The increase in price effected by the company is in conformity with the provisions of paragraph 20 (1) of DPCO 2013.
      The Company will be required to submit evidence (license issued by SDC/DCG (I) and invoice/sample, certified by CA/CMA) regarding the previous and the existing brand manufactured / marketed by it.
  • Any WPA case not coming under any of the above said categories will be referred for price fixation and, after fixing the price, the concerned companies shall be liable to deposit the over- charged amount along with interest from the date of overcharge, in addition to penalty, as per provisions of paragraph 15 of the DPCO, 2013.
  • The companies are instructed to submit complete and requisite documents as stipulated in paragraph 3 herein above. Companies are once again advised to check 'new drugs', if any, has been launched by them and obtain requisite price approval after complying with IPDMS requirements by submitting Form I prescribed in Schedule-II of DPCO, 2013, along with the documents as required by NPPA vide O.M. No. 19(78)/2014/Div.II/NPPA dated 07.02.2017 and OM No. 19(78)/2014/ dated 01.05.2017, if not done earlier26.




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