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NPPA refers industry representation on 50% price cut on patented components to MDC

Gireesh Babu, New Delhi
Saturday, April 8, 2023, 08:00 Hrs  [IST]

The National Pharmaceutical Pricing Authority (NPPA) has deferred fixing price of various anti-diabetic drug formulations with components which went off-patent of late, in a recent meeting, and referred the matter back to the Multi Disciplinary Committee (MDC) of Experts for examination in the light of industry representations.

The development is in connection with the NPPA’s methodology to calculate the price of drugs which have recently gone off-patent, under which it reduces the price of the patent component by 50 per cent while fixing the retail price.

However, NPPA said that it has received representation from Indian Pharmaceutical Alliance (IP Alliance), the organisation of the domestic pharma majors in the country, and Gujarat-based Torrent Pharmaceuticals Ltd in particular, related to the methodology.

The industry raised contentions that the price fixation of fixed dose combinations (FDCs), based on the methodology adopted by the MDC in its 49th meeting, reduces 50 per cent price on the patent component. The industry state that certain drugs have become off-patent almost two to three years back and the prices of the drugs that have become off-patent have since been reasonably reduced as compared to the patent price due to market forces.

Accordingly, they requested the NPPA that 50 per cent reduction on prices of patented component should not have been carried out and pricing should have been carried out as per the Drugs (Prices Control) Order provisions, which is the average price of the manufacturer having market share of more than one per cent.

The Authority deliberated upon the matter in a meeting held towards the end of March and decided to refer the matter back to the MDC for examination in the light of the representations made by Torrent Pharmaceuticals and IP Alliance.

Based on this, the Authority also deferred fixing retail price of almost 16 FDCs with dapagliflozin, sitagliptin, and vildagliptin as active ingredients, during the meeting.

It may be noted that the MDC, in a meeting held in January, this year, has followed its earlier methodology of 50 per cent reduction on the price of patented components, while fixing the retail price of FDCs with dapagliflozin, sitagliptin and vildagliptin.

The methodology was arrived in a meeting held on March 24, 2022 based on the recommendation of the Committee of Experts in a meeting held on March 14, 2022 for calculation of retail price of the FDC which has a component which has become or is on the verge of becoming off-patent.

The methodology was developed considering that if the retail price is calculated based on six month prior market data, the price of the patented period would be taken into consideration and the benefit of price reduction due to medicines which become off-patent would not pass on to the consumers.

Considering the issue related to fixing of the retail price of an FDC with sitagliptin as a component, the MDC on March 14, 2022, recommended, "The Committee deliberated upon the matter in detail and is of the opinion that the price of drugs be reduced in respect of the drugs which has become/on the verge of becoming off-patent so as to pass the benefit of price reduction to the consumers and that a reduction of 50 per cent to be allowed on the patented component of FDCs (i.e sitagliptin) to arrive at the retail price".

The methodology has been followed by the MDC for the other FDCs which have one of the components recently went off patent, since then.

However, after arriving at the decision to reduce the price by 50 per cent of the patented compound which has expired the patent exclusivity, the MDC in April, 2022, has said that it is looking at whether the benchmark of the 50 per cent reduction may be examined on case-to-case basis by the Committee for medicines which has become or is on the verge of becoming off patent.

 
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