Pharmabiz
 

DODGING PRICE CONTROL

P A FrancisWednesday, January 30, 2008, 08:00 Hrs  [IST]

A report in a leading financial daily last week said that the National Pharmaceutical Pricing Authority had detected large scale dodging of price control by pharmaceutical companies by altering either the pack sizes or strengths of formulations. This time the companies have been evading price control in the case of syrups, liquids and creams. NPPA has stumbled upon an ORG survey wherein several pharmaceutical companies have been found to be marketing nonstandard pack sizes of syrups, tonics and creams to escape price control. For instance, when a pharma company markets betamethasone lotion in a standard pack size of 16 mg, other companies are selling the same product in a slightly altered quantity just to avoid price control. Same practices were also found in thousands of cases of creams, eye ointments and gels. NPPA had detected similar cases of circumvention of price control in case of tablets and capsules shortly after the notification of DPCO, 1995. That time companies have been either changing the standard sizes of strips or slightly altering the strengths of tablets to escape price control. This practice was curbed through a notification issued by the NPPA on January 27, 1998 by fixing prices on a pro rata basis for strips. NPPA is working out the same formula for other segments like liquids, injectables and tubes so that the entire spectrum of scheduled drugs can be covered. It is estimated that there are only 12,000 formulation packs under the price controlled category and that constitute just 10 to 15 per cent of the total domestic pharmaceutical market. Now, once the pro rata price is fixed for a standard pack size, a corresponding price will be applied for same formulations irrespective of the pack sizes and strengths. The pharmaceutical companies are expected to work out the prices accordingly without approaching NPPA for approval. NPPA's action should benefit the ultimate consumer from being overcharged in case of price controlled formulations. Although there are just 74 drugs under price control, some pharmaceutical companies continue to skirt price control or break rules wherever possible. And this tendency is prevalent even amongst large and medium scale companies despite the fact that they are producing more drugs outside price control today. As a price regulator, it is NPPA's responsibility to track down this and many other ways of price manipulations by the companies on a regular basis. But, NPPA is unable to function effectively always as a price fixing and monitoring body as it does not have sufficient manpower and regional or state level offices. Because of this, NPPA does falter sometimes in fixing prices of controlled formulations on time. Detection of any price violations also comes to its notice much later because of this weakness. As monitoring of prices of controlled drugs is not coming under the jurisdiction of state drug authorities, price regulatory and monitoring job is entirely on NPPA. Union ministry of chemicals & fertilizers is aware of this and it has to empower the office of NPPA adequately if it has to carry out its responsibilities.

 
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