As in the case of earlier DPCOs, Department of Pharmaceuticals and National Pharmaceutical Pricing Authority are finding it difficult to fix and enforce new prices for 348 drugs covered under DPCO 2013 even after several months of its notification. Wherever NPPA finds scope for a reduction or only a marginal hike in prices of products, Such decisions are challenged by the pharmaceutical companies seeking higher prices. Over two dozen large companies have already disputed ceiling prices fixed for several products and approached for a review during the last six months. Some of these companies are Sun Pharma, Unichem Labs, Panacea Biotec, Win-Medicare, Albert David, Baxter (India), Indi Pharma and Gland Pharma. In many cases, DoP or NPPA rejected the claims of these companies seeking higher prices for want of justification. Now, the leading pharmaceutical companies are pointing out that the basis of price fixation by NPPA is not accurate as they consider IMS Health data used by NPPA does not represent the real prices. Following these complaints, DoP has directed NPPA to revalidate the data used for capping prices of all notified medicines. NPPA accordingly started seeking cost details of drugs from individual companies. Till then drug prices notified by NPPA has to be maintained by the companies.
The method of price fixation of drugs was changed for the first time in the DPCO 2013 on the demand of pharmaceutical industry although that move was strongly opposed by the patient groups. In fact, one of the main reasons for the delay in notifying the new drug policy was this dispute. A petition is still undecided in the Supreme Court over the method of price fixation of drugs in the new policy. While the industry and Department were in favour of price fixation on the basis of simple average of market price of a product, the petition filed by patient groups wanted the drug price fixing should be done on the basis of cost plus formula as was followed earlier. The Supreme Court had also observed in one of the past hearings that price fixing formula on the basis of average market price of a formulation in the new drug policy could lead to an increase in prices of life saving drugs and therefore the government should continue with the cost based pricing as in the previous policies. And it is a fact that prices of several drugs have gone up substantially after NPPA started fixing prices under DPCO 2013. Now, with pharma companies seeking review of a large number of drug prices already fixed and DoP asking the NPPA to revalidate the market data, the issue of drug price fixation is back to square one. The Department has also set up a committee to advise whether to allow different pricing for variants of one drug with claims of different therapeutic efficacies. The issue came up in wake of the demand for separate pricing for products of additional therapeutic efficacy of the same drug by certain companies. One glaring case is that of GSK. The company is selling its 500 mg paracetamol brand, Crocin Advance, at Rs. 30 for a strip of 15 claiming that it is a fast release product whereas NPPA capped the price of paracetamol 500 mg at 94 paise for a tablet or around Rs 14 for a strip of 15. GSK has claimed that Crocin Advance is a new drug and therefore should be outside price control. The claim is promptly rejected by NPPA as there is no proven additional therapeutic efficacy for the product. Cases like this can come from pharmaceutical companies in future as well just to circumvent provisions of DPCO and make unreasonable profits. NPPA and DoP have to be extremely vigilant and carefully scrutinize such claims of the pharma companies.