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NPPA eases price curbs on non-NLEM drugs

Nalinakanthi V BL Research Bureau | Updated on September 23, 2014 Published on September 23, 2014

In a surprise development the drug price regulator — the National Pharma and Pricing Authority (NPPA) — on Monday withdrew the internal guidelines issued to fix prices of drug formulations outside the National List of Essential Medicines (NLEM). These guidelines served as the basis for the NPPA’s move in July when it resolved to restrict the selling price of 108 formulation medicines used to treat cardiovascular disorders and diabetes.

 

Welcoming this move, S V Veerramani, President IDMA, added that the withdrawal of price fixation guidelines under para 19, which grants powers to restrict prices of drug formulations beyond the NLEM, will improve the viability of drug-makers. This should allay the fears of pharma companies, which were concerned about the widening span of control. This was because the Government could practically bring any drug under price control using the para 19 provision should there be significant deviation in the prices of various brands of the same underlying molecule.    

 

“With the reversal of the guidelines, it is expected that the NPPA will annul the price cap imposed on 108 cardiovascular and anti-diabetes drugs soon,” says Veerramani.  

 

This, if it happens, will spell a big relief for Sanofi India, the Indian subsidiary of the French multinational Sanofi. Sanofi India’s stock has fallen over 8 per cent since July, after the NPPA imposed a ceiling on its top-selling brands, including its anti-diabetes brands Amaryl and Cetapin V, and anticoagulant drug Clexane. These brands account for over a fourth of the company’s sales. Sanofi India’s stock zoomed over 11 per cent in trade on Tuesday in anticipation that the Government will soon lift price restriction on these drugs.

 

While the NPPA move may likely boost investor sentiment in pharma stocks, the patient community, which was hoping to save on its medical expenses, would be a disappointed lot.  

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Published on September 23, 2014
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