Although National Pharmaceutical Pricing Authority (NPPA) has fixed the prices of 108 formulation packs of 50 non scheduled drugs in antidiabetic and cardiovascular segments effective from July 10, 2014 in the wider public interest, the revised prices of these formulations have not been implemented as yet by the pharma manufactures in the country.

While the industry feels that prices of drugs are not in the interest of their business, NPPA maintains that companies have a mandate to abide by the new gazette notification failing which they will be held liable in contravention to the provisions of Drug Price Control Order (DPCO) - 2013.

The government’s move to put a cap on the pricing of cardiovascular and diabetes drugs are likely to impact bigger brands which were charging more for the same drug molecules.

Pharma companies feel that NPPA action may lead to a business loss of Rs. 600 crore which can impact the annual turnover to the tune of Rs. 6000 crore under the diabetes and cardio-vascular segments. The drugs that will become cheaper would include atorvastatin, gliclazide, glimepiride, heparin, metolazone propranolol, ramipril, rosuvastatin, simvastatin, telmisartan, terazosin, torasemide, trimetazidine and valsartan among others.

Retail trade associations inform that they have not received any revised price list of 108 non scheduled formulations from the manufacturers, the state drug regulator says that it is awaiting an intimation from the government on its implementation.  

Though the industry associations are against invoking Para 19 of DPCO by NPPA for extending price control to non-schedule products, Para 19 of DPCO, 2013 authorises NPPA in extraordinary circumstances to fix the ceiling price or retail price of any drug for such period as it deems fit.

The industry argues that if NPPA is allowed to pursue this course of action, every drug will be under price control, making National List of Essential Medicines (NLEM) redundant. As per the Drug Price Control Order (DPCO) 2013, the government currently controls the prices of 652 essential drug formulation listed in the NLEM.

It is estimated that around Rs. 5,500 crore of the pharma market will be impacted, with the range of prices being reduced from 10 to 15 per cent to as high as 35 per cent, with the average reduction of around 12 per cent.

According to experts, it is a rare invocation of a lesser used provision in the Drug Price Control Order (DPCO). The development is significant as NPPA has fixed prices of those medicines which are not listed under the national list of essential medicines (NLEM).

The total market of cardiac medicines under price control, including the earlier ones, stands at 58 per cent besides 21 per cent of the anti-diabetic market that comes under the drug control purview. Sanofi is likely to see the maximum impact of this price capping in India. Companies like Ranbaxy, Emcure, Zydus Cadila and Glenmark Pharma will also get impacted by the new pricing regime. Respiratory will be a major therapy area witnessing the impact with companies like Cipla, Lupin and GlaxoSmithKline Pharmaceuticals (GSK).