Abbott's review plea challenging NPPA ceiling price fixation of 18 formulations rejected by DoP

The Department upheld the Authority's decision to fix the ceiling price of 13 formulations and another 5 formulations, respectively, citing the drug giant's failure to submit revised Price to Retailer (PTR) values adjusted to the Wholesale Price Index (WPI) within the specified timeframe.

These 13 formulations include atorvastatin 40 mg tablet, atorvastatin 80 mg tablet, carbamazepine 200 mg tablet, levetiracetam 500 mg tablet, levetiracetam 750 mg tablet, linezolid 600 mg tablet, paracetamol 650 mg tablet, clobazam 10 mg tablet, carbamazepine 400mg tablet, amoxicillin 500 mg and clavulanic acid 125 mg tablet, pantoprazole 40 mg- injection, propranolol 20 mg tablet, and propranolol 40 mg- tablet.

While, five other formulations include levothyroxine 25 mcg, 50 mcg, 75 mcg, and 88 mcg tablets and zolpidem 10 mg tablet.

Abbott alleged that the NPPA erred in setting the ceiling prices for the drugs. They argued that NPPA did not consider the latest "Price to Retailer" (PTR) values for certain brands when calculating these prices. Additionally, Abbott claimed that NPPA did not follow their own guidelines for challenging draft ceiling price calculations.

The drug maker specifically mentioned that NPPA did not consider updated PTRs for brands as below:

The pharma firm further argued that NPPA should have followed their own clarification regarding revised price calculations, which stated that corrected calculations should be uploaded for public comments. They claimed that this process wasn't followed.

Abbott also submitted that delays in implementing revised Maximum Retail Price (MRP) or reflecting updated PTRs in market data shouldn't be seen as non-compliance. They provided evidence like product packaging to support their claim.

Based on these arguments, Abbott claimed that the ceiling prices for the drugs in question are incorrect and should be revised to reflect the updated PTRs.

In response to Abbott Healthcare's allegations regarding the pricing of certain medications, NPPA argued that they followed all necessary procedures and considered all valid price revisions submitted by companies and used the most accurate data available.

NPPA clarified that companies can only increase prices once a year in April and must submit a form (Form-II/V) within 15 days of this change. They considered price revisions only for brands that submitted the correct forms by the deadline.

For several brands mentioned by Abbott, NPPA found that they either didn't submit the required forms or submitted them incorrectly. In these cases, NPPA used the most accurate price data available from market research.

Abbott had previously cited an NPPA clarification about uploading revised price calculations for public comment. In this context, NPPA clarified that this applies only to price corrections initiated by them, not revisions based on company submissions.

The Authority clarified that a previous statement regarding revised price calculations applies only to price corrections initiated by them (Suo Moto corrections). For price revisions based on representations from companies, the prices will be recalculated based on verified data from Pharmarack. Following this, revised price notifications will be issued.

Examining the matter, DoP observed that NPPA emphasized that they followed the due provisions of the Drugs (Prices Control) Order (DPCO) in setting the ceiling prices. The DPCO mandates that manufacturers can increase prices once a year in April and must submit necessary information within 15 days. NPPA considered price revisions only for brands that complied with these requirements.

Furthermore, NPPA clarified that a previous decision regarding revised price calculations applied only to price corrections initiated by them, not those based on company submissions, the Department observed.

Based on these findings, DoP concluded that NPPA's actions were justified, and the review applications filed by Abbott Healthcare were rejected. It said;

"The action of NPPA fixing the ceiling prices of scheduled formulations is upheld and the Review Applications under consideration is accordingly rejected."