NPPA slashes prices of 8 popular drugs by up to 85%

NEW DELHI: The country’s drug price regulator has reduced prices of eight medicines sold by leading pharma companies such as Cipla, Sun Pharma and Unichem by up to 85%, in one of the sharpest price cuts over the past few years.

The National Pharmaceutical Pricing Authority (NPPA), a few days ago, slashed the maximum price at which these eight medicines could be sold after its market survey found that companies were selling them at a huge premium compared with their manufacturing and sale cost.

NPPA prescribes a price ceiling for drugs containing any of the 74 chemicals that are under price control to contain the cost of medication for consumers.

The prices of seven of these eight brands have been fixed by the drug price regulator for the first time. The maximum price for Cipla’s popular combination antibiotic, Ciplox TZ, has been cut by 74% from Rs 100.73 to Rs 25.7 (excluding taxes) for a 10-tablet strip.

Hemant Bakhru, an analyst with brokerage firm CLSA, said the Ciplox TZ price cut will adversely impact operating profit and bring down Cipla’s earnings per share by 1%. “The impact will be felt from end of this fiscal,” he said. Cipla is the second-largest player in the domestic drug retail market.

As per industry estimates, Ciplox TZ, along with parent brand Ciplox, rakes in about Rs 100 crore for Cipla, though Ciplox, which is among Cipla’s largest-selling brands, accounts for more than half of this.
The price of Rexcin Pharmaceuticals’ popular burn ointment, Silverex AV cream, has been slashed by around 85% to Rs 25 for a 20-gm tube.

Most are combination drugs

The prices of Sun Pharma and Unichem’s combination blood pressure medicines—Spironolactone +Torsemide—have been halved and will now cost Rs 21 and 24 for 10-tablet strips, respectively.

But a Sun Pharma spokeswoman said there will be no impact on the company as its drug sold under brand Aquamide has negligible revenues. The regulator has slashed the price of Cosmo Life Sciences vitamin capsules Lycobal Forte by 88.7% to Rs 8.90 (excluding taxes) for 10 capsules. The other medicines whose prices have been cut include JB Remedies’ Nor-Tz tablets and Okassa Pharma’s Burn Heal cream.

Most of the medicines whose prices have been cut are combination drugs i.e. drugs that have more than one molecule. As per Indian laws, a combination drug that contains an ingredient that is under price control has to automatically conform to the price ceiling mandated by the drug price regulator.

But companies launch these combination brands at much higher prices without taking the mandatory prior-pricing approval. “Many of these products are combination drugs, and companies have for long been using this strategy to escape price control. NPPA should have taken such steps much earlier since companies have already made huge profits,” said CM Gulati, editor, Monthly Index of Medical Specialities, a leading medical journal.

The price revision was part of a notification by the regulator on Monday. The drugmakers have to revise their prices within 15 days of the notification, failing which they could be penalised for overcharging consumers.