52 more drugs brought under price ceiling

This would be in addition to 348 drugs already under price ceiling

The National Pharmaceutical Pricing Authority (NPPA) has capped the prices of another 52 essential drugs, in a move that could impact drug manufacturers Lupin, Cadila Healthcare and Merck.

This is in addition to the 348 drugs already under a price ceiling. The majority of the 52 new drugs are antibiotics, painkillers and medicines used for treating cancer and skin disorders.

The government caps prices of regulated medicines based on a simple average of prices of all drugs in the segment with over one per cent market share.

Reacting to the latest order by NPPA on Friday, a spokesperson of Lupin said, “Though Lupin will not see any impact, we have always maintained that competition is a great leveler and the market finds its own level when it comes to matters such as pricing.”

ON A TIGHT LEASH

• Used for cancer and skin disorders, the capped drugs are primarily painkillers and antibiotics
• Lupin, Cadila Healthcare, Merck, could be affected following the order
• NPPA had to withdraw a May order that gave the regulator capping prices of 108 non essential drugs
• At present, NPPA regulates prices of 348 medicine formulations listed in the NLEM
• Govt caps pricing of regulated medicines based on a simple average of prices of all drugs in the segment with over 1%

Following the NPPA order, shares of Cadila Healthcare settled more than two per cent lower on the BSE exchange at   Rs 1,582.35 on Friday. Shares of Lupin, however, ended one per cent higher at Rs 1,451.

The NPPA order asks manufacturers of these scheduled formulations to reduce the maximum retail price of the drugs wherever the existing rate exceeds the ceiling. For prices already below the ceiling, manufacturers can maintain the existing maximum retail price. The manufacturer may add local taxes only if these have been actually paid or are payable.

NPPA said where a manufacturer of these formulations with dosage or strength or both as specified launch a new drug, it shall apply for prior approval under the Drug Price Control Order, 2013.

The move comes after NPPA was forced to withdraw pricing powers of 108 non-essential medicines following a government directive. Drug companies operating in India had cheered the move then, but the latest order may set things one up with the regulator exercising its pricing power. In fact, companies had challenged in court the NPPA order bringing down prices of 108 non-essential drugs by invoking the public interest. Industry bodies such as the Indian Pharmaceutical Association and the Organisation of Pharmaceutical Producers of India went to court against the NPPA’s move in July.

In its notification, NPPA set prices of formulations based on bulk drugs for paracetamol, bleaching powder, ketamine hydrochloride, zinc sulfate, ascorbic acid, cloxacillin, gentamycin, glucose, glucose with normal saline, mannitol, amoxycilline with potassium clavulanate, metoprolol succinate with cilnidipine (cardiocil M), and a number of other combination drugs.