The Department of Pharmaceuticals (DoP) has directed the national drug price regulator National Pharmaceutical Pricing Authority (NPPA) to revise the retail price of metronidazole injection 500mg/100ml, metronidazole tablet 200mg and metronidazole tablet 400mg as the DoP has found that the NPPA has erred in fixing the ceiling prices of these drugs.
Earlier, the NPPA vide its price fixation Order S.O. No. 834(E) dated 25/3/2015 had fixed/revised ceiling prices of these drugs under DPCO, 2013. Aggrieved by the notification, JB Chemicals & Pharmaceuticals had submitted a review application dated 6.4.2015 under para 31 of DPCO, 2013 for the review of the NPPA price fixation order.
In its review application, the petitioner argued that the price of these formulations which are common formulations under DPCO 1995 and DPCO 2013 were fixed under DPCO 1995 on December 20, 2013. As per provisions of para 9(6) the reference data for the formulations which are part of the DPCO 1995 shall be as per the provisions of para 10 of DPCO 2013. Para 10(1) deals with common formulations the prices of which were fixed upto May, 2012 and para 10(2) pertains to common formulations prices of which were fixed after May 2012. As per provision of para 10(2) immediately after completion of one year the manufacturers were permitted to revise the prices as per annual WPI for the previous calendar year and on April 1 of succeeding financial year as per the formula in sub para 1 of para 4 of DPCO 2013 shall be applied.
The petitioner mentioned that their case falls under para 10(2) of DPCO 2013 and immediately on completion of one year i.e. 21.12.2014 they had availed WPI as per the provision of para 10(2). Further as per provisions of same para 10(2) they were eligible on first April of the succeeding financial year i.e. 1.4.2015 on which they were eligible for another WPI increase. The petitioner representative mentioned that this increase on 21.12.2014 has not been accounted for by NPPA while fixing the price on 1.4.2015.
In reply, the NPPA stated that para 9 of DPCO 2013 specifies the reference data and source of market based data. The reference data for new drug has been stated to be 6 months before the receipt of application for new drug. In case of first time introduced formulations under DPCO 2013 the reference data of May 2012 has been specified under DPCO 2013 which is 6 months before the date of announcement of National Pharmaceuticals Pricing Policy 2012. In case of revision in first schedule reference date would be 6 months before the date of notification of revision of first schedule. Para 9(6) states that the reference date for the common formulations shall be as per provision of para 10 of DPCO 2013. However, reference date relevant to reference data has not been specified in para 10.
The NPPA further stated that NPPA in its 12th Authority Meeting decided that cases where ceiling prices were fixed prior to May 2012 in DPCO 1995 would be notified in April 2014 and cases where ceiling prices were fixed after May 2012 in DPCO 1995 would be notified in April 2015. Accordingly, NPPA started notifying ceiling price under DPCO 2013 from April 2014 onwards for common formulations where ceiling prices were fixed prior to May 2012 by considering reference data of September 2013. The data of September 2013 was uniformly considered for all common formulations irrespective of actual date of fixation to have uniformity. Similarly, the reference data for common formulations where ceiling prices in DPCO 1995 were fixed after May 2012 (June,2013 / December,2013 for concerned formulations), reference data for September 2014 i.e. 6 months prior to April 2015 was considered.
After hearing both the parties, the reviewing authority, DoP concluded that the NPPA has erred in considering the data pertaining to 6 months before i.e. September 30 of the previous year by which they have ignored the WPI availed by the petitioner under para 10(2) quoted above. NPPA is also not correct in presuming that two WPI cannot be given in one year. DPCO, 2013 under para 9(6) and 10(2) contains special provision of WPI for common formulations under both DPCO 1995 and DPCO 2013 i.e. first after one year of cooling and second in the beginning of the next financial year. Moreover in the instant case the WPI availed by the petitioner in December 2014 after one year of the notification date and second on April 1, 2015 i.e in the next financial year. Therefore the point of two WPI in one year by NPPA has no merit.
“NPPA is directed to revise the prices of the subject formulations after the petitioner had availed WPI in December 2014 as per provisions of para 9(6) and 10(2) of DPCO 2013. The company will be entitled for WPI again w.e.f. 1.4.2015,” the DoP ordered.