The Department of Pharmaceuticals (DoP) has turned down a review petition filed by Biocon Limited against the ceiling price fixed by the National Pharmaceuticals Pricing Authority (NPPA) for its trastuzumab injection 400mg/50ml.
The national drug price regulator had revised the price of the formulation to Rs. 54,582.25 based on the multiplication factor 0.95905. The pharma major contended that the use of multiplication factor 0.95905 was “incorrect and untenable” since the said product was exempted from excise duty.
It may be noted that the regulator fixed prices of specified pharma formulations after excluding the excise duty levied prior to GST regime by applying a factor of 0.95905 on prevailing earlier prices wherever applicable.
To substantiate its claim, the company has quoted an NPPA office memorandum which states that “in case of schedule formulations which are exempted from excise duty, no multiplication factor would be applicable. The existing ceiling price would be the ceiling price exclusive of GST rates as applicable.”
“The companies were directed to provide a list of scheduled formulations with excise duty exemption applicable as on August 31, 2015. A perusal of the memorandum makes it evident that the date for consideration of the status of excise exemption was August 31, 2015 and for the formulations which were exempt on the said date, no revision of their prices would be required,” it said.
In its review petition, the drug maker has requested the DoP to pass a speaking order to change the ceiling price of trastuzumab injection 440 mg/50 ml to Rs. 56,912.8 exclusive of GST by applying a multiplication factor of 1.
During the proceedings, the NPPA stuck to its guns saying the ceiling price of trastuzumab injection was notified as per DPCO, 2013.
The DoP accepted the views of the regulator. “When the original ceiling price was notified, the calculation was based on August 2015 data when the formulations were excise exempted. In January 2017, excise duty was first made applicable on the aforesaid formulations. During implementation of GST in June 2017, the NPPA reduced the ceiling price to provide an effect for removal of excise duty without citing any provision under DPCO 2013 which allowed for such a reduction in the ceiling price of scheduled formulations due to a reduction in excise duty,” it observed.
Outrightly rejecting Biocon’s argument, the DoP observed: “Levy of or exemption from any duties has no bearing on fixation or revision of ceiling prices under the provisions of DPCO, 2013. The ceiling prices are fixed on market-based data and not on cost-based data. Any plea for revision or refixation of ceiling prices on account of any modification in the applicable duty rates is not tenable under the provisions of DPCO, 2013.”
“Applying factor of 0.95905 by the NPPA while revising the ceiling price of post-GST regime is in order. Hence, the request of the company cannot be considered and the review application stands rejected,” it stated.
Trastuzumab injection is used to treat HER2-overexpressing new or metastatic breast cancer. It can be used alone or with other cancer medicines.
Biocon is an innovation-led fully integrated biopharmaceutical company based in Bangalore that has developed affordable biosimilars, novel biologics and complex APIs. It’s a leader in fermentation-based biopharmaceuticals.