DoP junks Cipla plea against NPPA for price fixation of Synchrobreathe Inhaler

New Delhi: In a setback to drugmaker Cipla Ltd., the Department of Pharmaceuticals (DoP) has rejected its review petition filed against the notification issued by the National Pharmaceutical Pricing Authority  (NPPA), fixing the retail prices of Synchrobreathe Inhaler Device.

Cipla in its plea contended the ceiling price of Synchrobreathe Inhaler Device is fixed arbitrarily and on an unjust basis by the NPPA and the Authority has erred by not allowing the company an annual price increase by WPI for the Synchrobreathe Inhaler Device under the provisions of Para 16 of DPCO, 2013.

The company submitted an application to the NPPA seeking incremental separate price of 'Synchrobreathe Inhaler Device' for its formulation Budesonide 200mcg + Formeterol 6mcg 120MDI and Budesonide 400mcg + Formeterol 6mcg 120MDI. The company proposed an incremental cost of Rs.240/- per device for Synchrobreathe Inhaler Device.

As per provisions in para 11(3)&(4), the application of the company was placed before the Multidisciplinary Committee of Experts for considering separate / special price of Synchrobreathe Inhaler Device. The Multi-disciplinary Committee of Experts also co-opted two members nominated by ICMR (Prof. Y.K. Gupta, Adviser(Projects), THSTI & Dr. Pooja Gupta, Asso. Prof., Deptt. of Pharmacology, AIIMS), with expertise in pharmacoeconomics to assist in deliberations related to costing of new products.

The Committee deliberated the application in its 14th meeting held on 4.12.2019 and noted the documents/journal/study report submitted by the company and also noted the demonstration made by the company in respect of its product "Synchrobreathe Inhaler Device". After detailed deliberations, the Committee observed that since the claim of the company of incremental innovation is supported by published journal, well-designed study, adequate trial, conclusive clinical data, it opined for allowing 20% price increase to the company for its 'Synchrobreathe Inhaler Device'.

Accordingly, the Committee recommended the additional price of Rs.67.20 (excluding GST) on the ceiling of the inhalation having Synchrobreathe Inhaler device. The committee also recommended that the additional price of Rs.67.20 for the device would remain fixed.

Responding to the contention, NPPA stated that the authority in its 71st meeting held on 09.12.2019 fixed the additional price for Synchrobreathe inhaler at Rs. 67.20 (exluding GST) based on the recommendation of 14th meeting of the multi-disciplinary committee of experts held on 04.12.2019.

"Since the claim of Cipla of incremental innovation was supported by published journal, well-designed study, adequate trial, conclusive clinical data, the committee opined that a 20% price increase may be allowed to the company for its product "Synchro breathe inhaler device". Accordingly, the committee recommended the additional price of Rs. 67.20 (excluding GST) on the ceiling price of inhalation having "Synchro breathe inhaler". The company's contention that NPPA ignores the pharmacoeconomics principles while fixing the additional price for Synchro breathe inhaler" device is not correct," NPPA submitted.

There is ceiling price for Budesonide 200mcg+ Formoterol 6 mcg-120 MDI inhalation and for Budesonide 400mcg-120 MDI inhalation and benefit of WPI under para 16 is applicable. The Committee recommended that the additional price of Rs. 67.20 (excluding GST) on the applicable ceiling price of the inhalation "Synchro breathe inhaler device" would remain fixed irrespective of the change in the ceiling price of the inhalation. The claim of the company for WPI benefit on additional price is not in accordance with the provisions of DPCO, 2013, since, the separate price for "Synchro breathe inhaler device" has been fixed under para 11(3) of DPCO, 2013, the Authority added.

The company also contended that the NPPA has erred by not allowing the company an annual price increase by WPI for the Synchrobreathe Inhaler Device under the provisions of Para 16 of DPCO, 2013. As per provisions in para 16 of DPCO, the Government shall revise the ceiling prices of scheduled formulations as per the annual wholesale price index (WPI) for preceding year on or before 1st April of every year and notify the same on the 1st day of April every year. The impact of WPI is given on the ceiling price of schedule formulation and not on the device.

Examining the matter, DoP noted that while fixing the special price for Synchrobreathe Inhaler device, due consideration was given to all the relevant aspects, like documents/journal/study report and the demonstration made by the company and the recommendation of the Multidisciplinary Committee of Experts for the product is a well-thought decision. Therefore, the contention of the company that the ceiling price of Synchrobreathe Inhaler Device is fixed arbitrarily and on the injust basis by the NPPA, is not correct.

DoP further observed, In this case, the benefit of WPI will be applicable only on the scheduled formulation, i.e. Budesonide + Formeterol, and not on the Synchrobreathe Inhaler Device, which is a plastic container. Hence, the contention of the company has got no merit.

As per provisions in para 31 of DPCO, the review application can be filed when price is fixed under para 4, 5 and 6 of DPCO, whereas in the instant case the separate price for "Synchrobreathe inhaler device" has been fixed under para 11(3) of DPCO, the court added.

Subsequently, DoP rejected the plea moved by Cipla while noting;

The separate price of the device is fixed after due deliberations in the Multidisciplinary Committee of Experts, which also noted the demonstration made by the company. Moreover, the impact of WPI is applicable only on the scheduled formulation, i.e. Budesonide + Formeterol in the instant case, and not on the Synchrobreathe Inhaler Device, which is a plastic container. Therefore, the review application is not sustainable and deserves to be rejected.

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