Drug cos' price cut offer helps NPPA fix offenders

NEW DELHI: The pharmaceutical industry’s recent offer to cut prices of 886 medicines to dissuade the government from going ahead with a tougher pricing policy has boomeranged.

The list of drugs given by the industry has emerged as an incriminating evidence for some of the ill practices in the pharmaceutical industry. Drug price watchdog National Pharmaceutical Pricing Authority (NPPA), which scrutinised the list, has found that 97 of them were violating the pricing norms set by the government.

Of these, 58 formulation packs — strips or bottles of specified strength of the medicine — were overpriced and 39 others had not obtained a government approved price as required. As per the law, if a drug contains one or more of an ingredient that is price-controlled, then the finished product is also under price control. Companies are required to get a price fixed by NPPA for these brands every time the regulator fixes or revises the ingredient’s price.

NPPA has now issued notices to the companies on all the 97 cases of violation. A few of the companies have told the regulator that they no longer make some of these drugs, proving true earlier media reports that questioned the integrity of drug companies’ offer to cut prices.

According to sources, drug companies are reluctant to get prices approved by NPPA and they react only when the regulator catches up. Mostly, investigations on overpricing are initiated based on consumer grievances. Some other firms secure marketing approvals from state drug controllers for the same drug with minor changes in their composition and sell them at a higher price.

Since there is no government fixed price for that new composition, although the drug is under price control, some companies overprice them. The Monopolies and Restrictive Trade Practices Commission (MRTPC) is also investigating into such cases. It has recently asked the state drug controllers to provide details of all new combinations of existing drugs approved in recent years.