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NPPA slaps Rs.300 crore penalty on Novartis for overcharging

Our Bureau, MumbaiMonday, October 13, 2014, 14:00 Hrs  [IST]

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.

A Novartis spokesperson on conditions of anonymity informed Pharmabiz, "We have 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."

As per the notice, drug pricing regulator has asked the company to explain within two weeks why action should not be taken against it for overcharging. According to IMS Health annual data, with annual sales of about Rs.225 crore, Voveran was among the top 10 brands in the domestic drug retail market as of April this year.

Voveran, Novartis’ analgesic brand, is based on diclofenac, a component under the government’s direct price control. As per the DPCO -2013, it costs Rs.29.25 for a strip of 15 Voveran SR 50 mg tablets. The drug has been overpriced three times the DPCO price. A strip of 15 Voveran SR 50 mg tablets currently costs Rs.74 currently, while one of 100 mg comes for Rs.102.

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.

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.

 
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