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GlaxoSmithKline Consumer Healthcare has paid Rs 48 crore in fine to the National Pharmaceutical Pricing Authority for overcharging for its Crocin Advance fever and pain-relief pill.
“We had raised a demand of Rs 55 crore but the company has paid a fine of Rs 48 crore while raising some points on the higher demand. We are in the process of examining their explanation and will decide on the rest of the amount of penalty in a few days,” Authority Chairman C P Singh said.
He added Crocin Advance’s price had been halved to match with paracetamol’s, as fixed by the Drugs (Prices Control) Order, 2013 in May last year. The company was earlier selling Crocin Advance fast release 500mg at Rs 30 for a strip of 15 tablets. The price of paracetamol 500mg (the key ingredient in Crocin Advance) is capped at 94 paise for a tablet or about Rs 14 for a strip of 15.
Singh said the fine was calculated based on the overcharged amount starting May 2013. GSK had earlier sought an exemption from the price control, contending Crocin Advance was developed locally. Under para 32 (iii) of the Drug Price Control Order 2013, a new drug developed through indigenous research can be kept out of price control for five years. The company had claimed the product was a new drug, with optizorb technology that releases its medicine up to five times faster than ordinary paracetamol tablets, providing fast relief.
However, a committee constituted by NPPA had rejected GSK's argument. In a letter to GSK in March, NPPA said the product did not qualify for the exemption because “the formula and process technology were transferred from R&D Parsippany (in New Jersey, US) to R&D India in May 2006” and the research centre in India was also not approved by the department of scientific and industrial research, required under the Order.
GSK Consumer Healthcare sells paracetamol under several over-the-counter brands such as Crocin, Crocin Advance, Crocin Pain Relief, Crocin Cold and Flu. It also has a baby and kids range of Crocin. GSK launched Crocin Advance in India in 2011.
According to IMS Health data, Crocin Advance is the fifth largest brand among top paracetamol-based products.
Annual sales were Rs 10 crore during the year ended February. Calpol, another paracetamol-based product marketed by GSK Pharma, tops the list with annual sales of Rs 84 crore.
On Tuesday, shares of GSK Consumer Healthcare ended at Rs 4,789 on the BSE, down 0.65 per cent from their previous close.
