The department of pharmaceuticals (DoP) has directed the National Pharmaceutical Pricing Authority (NPPA) to revise the prices of chloroquine phosphate injection (40mg/ml- 64.5mg eq to 40mg chloroquine) and metronidazole 200 mg & metronidazole 400 mg tablets. The DoP was acting on a review application filed by Abbott Healthcare Pvt. Ltd against the fixation/revision of ceiling prices of these drugs by the NPPA.

Earlier, the NPPA vide price fixation Order S.O. No. 834(E) dated 25/3/2015 had fixed/revised ceiling price of “chloroquine phosphate injection (40mg/ml- 64.5mg eq to 40mg chloroquine) and metronidazole 200 mg & metronidazole 400 mg tablets” under DPCO, 2013.

Aggrieved by NPPA order, Abbott Healthcare Pvt. Ltd. submitted a review application dated 16.4.2015 to the reviewing authority DoP under para 31 of DPCO, 2013 for the review of 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 1st April of succeeding financial year as per the formula in sub para 1 of para 4 of DPCO 2013. The petitioner representative 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. In a nutshell, there must be a reference date/data to be considered for price fixation. DPCO 2013 only prescribes 6 months criteria.

After hearing the rather lengthy arguments and counter-arguments of both the parties, the DoP stated 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 was in December 2014 and second on 1April 1, 2015 i.e. in the next financial year. Therefore the point of two WPI in one year by NPPA has no merit.

DPCO 2013 provides in para 4(1) to include all brands and generic versions irrespective of their size or volume. Under para 11(1) the prices of the pack has to be calculated by multiplying the ceiling price with the volume. The petitioner has no merit in this point.

The DoP then ordered, “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 petitioner will be entitled for WPI again w.e.f. 1.4.2015.”