Cases on Drug Price Control Order to come up next week

Next week will see two cases come up, related to the recently revised Drug Price Control Order, 2013.

The National Pharmaceutical Pricing Authority (NPPA) requires drug companies to sell their products with revised prices, after 45 days from when the new prices were notified by the Government.

But in a recently filed petition in the Delhi High Court, Cipla has said that it is possible for all new stocks manufactured after the date of notification to bear the revised prices. But, it would be difficult to recall all stocks already supplied into the market with taxes paid on it, a legal representative, familiar with the case said.

An NPPA official, however, maintains that companies were familiar with the new pricing formula that was to come into force and should have planned accordingly. The new drug pricing policy had brought all 348 drugs in the National List of Essential Medicines, under the ambit of price control. The ceiling price had been fixed at the simple average of all drugs in a particular formulation with a market share of one percent.

In a separate case, filed in Gujarat by Alembic, the company has raised the interpretation of this formula, as well. Companies in the past have said that all brands with a market share of one percent needed to be calculated. The NPPA, though, was calculating this by including multiple brands in a single formulation, from a company.

Drug associations have in the past raised these calculation concerns with the NPPA.

The NPPA chief had earlier told Business Line that consumers would see revised medicine prices by mid-August. Medicine prices, across various categories including antibiotics, anti-infectives, pain etc, are expected to see prices dip from 10 to 70 percent, say analysts. Large companies, both domestic and multinational, stand to be impacted. According to industry estimates, price controlled drugs contribute about 18 percent of the over Rs 70,000 crore domestic pharmaceutical market.

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