The National Pharma Pricing Authority, the drug regulators have received a deadline of two months to revise its November order and allow multinational companies to enhance prices of imported insulin injections. Until then,the mandated price set by the drug price regulator will remain in force.
In a series of review orders issued in the past two weeks, the pharma department has asked the drug pricing regulator to let MNCs charge higher margins of up to 50% of the landed costs on imported insulin, citing a select provision of the Drug Pricing Control Order 1995.
In November, the drug price regulator fixed two ceiling prices for insulin-one for the imported version and the other for those manufactured within the country to make the product more affordable to consumers. Before that, the prices of insulin were set using a cost method that computed different prices for different brands by factoring in input and packaging costs.
The NPPA while fixing the ceiling prices kept in mind internal guidelines of 1999, and made a distinction for those insulin products with a local substitute in the country. While those guidelines allow up to 50% margin for imported drugs if they do not have a substitute in the market, the margins could be slashed up to 35% if alternatives are available in the domestic market.
The department of pharma, in its review orders has objected to this interpretation claiming insulin is not like other drugs, where substitution with a generic version can apply.
“… the Department had sought the comments of NIPER (National Institute of Pharmaceutical Education and Research), Mohali and their technical opinion is that….dispensing of generic medicines in place of innovator product without …consent of the physician works very well with the small molecules where once the structural equivalence has been established…This abridged approach, however, is generally not recommended for protein pharmaceuticals (insulin) even in cases where the structures are similar,” said its review order against Eli Lilly.
Novo Nordisk challenged NPPA’s November order in the Delhi High Court. The court asked the pharma player to appeal for review before the department of pharma. Since then the pharma department has been hearing multiple appeals of insulin makers.
The pharma department has questioned the power of NPPA to take such pricing calls under the present framework. If the stand of the drug price regulator had to prevail, the Drug Pricing Control Order 1995 would need to be amended, which is “beyond the powers of NPPA”, the order said.
“It is a case of different interpretation of the same law by the pharma department and us. Some of these guidelines have been followed for over 12 years now,” an NPPA official told ET.
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