Clarifying that the DPCO does not recognise a company for average PTR but only medicines / formulations, the Department of Pharmaceuticals (DoP) has directed the NPPA to refix the ceiling prices of the formulations cefixime 200mg, amoxicillin 1gm+clavulanic acid 200mg powder for injection, amoxicillin 500mg+clavulanic acid 125mg, amoxicillin 500mg capsules by considering only those medicines / formulations having MAT value of more than 1% market share.

The DoP's clarification in this regard came after examining a review application filed by Cipla Ltd against price fixation of “Cefixime 200mg, amoxicillin 1gm + clavulanic acid 200mg powder for injection, amoxicillin 500mg + clavulanic acid 125mg, amoxicillin 500 mg capsules” by the NPPA through its order No. S.O. 1816(E) [corrected 1819(E)], dated 18.05.2016 issued under DPCO 2013.

In the review petition, Cipla contended that the ceiling prices of the aforesaid formulations  should not be revised as the formulations were in NLEM 2011 and continue to be included under the revised NLEM 2015. Ceiling prices of the above mentioned formulations were already in force prior to issuance of SO No. 1816(E) [corrected SO 1819(E)] dated 18.05.2016. Further, only those brands having more than 1% market share should be considered for the purpose of calculation of the ceiling prices.

During examination, DoP noted that as regards the contention of the petitioner company that ceiling prices for the medicines “added” in the NLEM 2015 have to be fixed and not for the products which are already in NLEM 2011, it is stated that Para 18(i) of DPCO 2013 clearly states that the revision of ceiling prices on the basis of moving annual turnover value shall be carried out “as and when the NLEM is revised by the Ministry of Health and Family Welfare or five years from the date of fixing the ceiling price under this Order whichever is earlier.”

In view of this, NPPA has revised the ceiling prices of the formulations, mentioned in amended list of scheduled formulations, strictly as per the provision of DPCO 2013. Therefore, the petitioner company has no merit in this contention. Regarding the contention of the petitioner company about the criteria for fixing ceiling price of the subject formulations, on examination, it is found that NPPA has erred in calculating ceiling price as per para 4 of DPCO, 2013.

It clearly mentions that the medicines are to be taken for calculation. In the instant case, the principles applied by NPPA go beyond what is mentioned in DPCO. Hence, NPPA may be directed to refix the ceiling price in accordance with the provisions of DPCO. The DPCO does not recognise a company for average PTR but only medicines/formulations. Thus, only those formulations are to be considered, which are having MAT value of more than 1% market share.

“NPPA is hereby directed to refix the ceiling prices of the formulations cefixime 200mg, amoxicillin 1gm+clavulanic acid 200mg powder for injection, amoxicillin 500mg+clavulanic acid 125mg, amoxicillin 500mg capsules by considering only those medicines/formulations having MAT value of more than 1% market share, as DPCO does not recognise a company for average PTR but only medicines / formulations,” the DoP in its order said.