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The National Pharmaceutical Pricing Authority (NPPA) has imposed a fine of around Rs 300 crore on Swiss multinational drug company Novartis for overcharging consumers on sale of Voveran, its best-selling painkiller medicine.
The drug pricing regulator also served a showcause notice on the company, asking to explain within two weeks why action should not be taken against it for overcharging, a source in the know of the development, who did not wish to be named, told Business Standard.
Novartis' analgesic brand, Voveran, is based on diclofenac, a component that is under the government's direct price control. According to IMS Health annual data, Voveran, with annual sales of about Rs 225 crore, was among the top 10 brands in the domestic drug retail market as of April this year.
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When contacted, a spokesperson for Novartis confirmed the company had received a notice from NPPA. "However the basis of the demand itself has been challenged by us before the Delhi High Court. Since the matter is sub judice, we are unable to comment further," she said.
The new drug price control order, implemented in May last year, brought 348 medicines under price control. The prices of these were capped at an average of the prices of all drugs with more than one per cent market share in their respective segments.
However, Novartis, Cipla and GlaxoSmithKline had approached the court in July last year to protest against provisions of the new order, which required them to replace within 45 days their stocks in the market with new ones mentioning revised prices.
According to a trade source, a strip of 15 Voveran SR 100 mg tablets currently costs Rs 102, while one of 50 mg comes for Rs 74.
Voveran's market share is believed to have dipped since the new pricing regime came into force. The IMS data show the value growth of the drug has fallen 14.5 per cent from last year.
Industry analysts say Voveran faced a sharp cut after the new price control order as it was one of the more expensive brands in the segment and had a huge market share.
Recently, a Delhi High Court Bench of judges B D Ahmed and Vibhu Bakhru said representatives of pharma companies should hold a meeting with NPPA and the government to settle the matter. "You hold a meeting with the director of NPPA and come back in October. We expect the meeting to take place and be concluded before the next date of hearing (October 30). You should try to resolve the issue once and for ever. We are also tired of hearing it," the court said while hearing a bunch of petitions moved by drug makers challenging the government's new drug pricing order.
