One Time Rise: NPPA approves 50 percent price hike for Carbamazepine, Ranitidine, Ibuprofen

After the latest increase, the price of carbamazepine would range from Rs 1 to Rs 4.61 per tablet, depending on the dosage; for ranitidine, the new price would be in the range of Rs 1-2.43 per tablet or per ml of liquid; for ibuprofen, it would be 59 paise to Rs 1.04 per tablet. These prices are exclusive of goods and services tax.

While carbamazepine is an anti-epileptic drug, ranitidine is used for the treatment of ulcers of the stomach and intestines and to prevent intestinal ulcers from coming back after they have healed. Ibuprofen is used to relieve pain from various conditions such as headache, dental pain, menstrual cramps, muscle aches, or arthritis.

The move will prove beneficial for drug makers like Torrent Pharmaceuticals, Cadila Pharmaceuticals, Zydus Cadila, and J B Chemicals as they have top-selling ranitidine brands. Sun Pharmaceuticals, Torrent Pharmaceuticals, Intas, and Abbott have leading carbamazepine brands, while Cipla and Abbott have popular ibuprofen brands.

The decision was taken in line with the 89th Authority meeting under DPCO 2013, held on June 28, 2021, where the subject of Revision of Ceiling Price of select Scheduled formulations under Paragraph 19 of DPCO, 20 13 was thoroughly examined.

The authority noted at the meeting that NPPA has been receiving applications for upward price revision under Paragraph 19 of the DPCO, 2013 for more than two years, citing various reasons, such as drugs being subject to reduced price regulation, an increase in the cost of production, exchange rate volatility, and so on, resulting in their unviability in the sustainable production and marketing of these drugs.

The Authority further noted that the issue relating to application for upward price revision under Para 19 of DPCO 2013 was referred to the Standing Committee on Affordable Medicines and Health Products (SCAMHP), Niti Aayog, Government of India for guidance on the modalities / methodology to be followed for such cases.

In this regard, SCAMHP authorized NPPA in its 2nd meeting on 07.11.2019 to examine formulations / molecules experiencing manufacturing unviability due to low prices and apply for price revision by allowing a 50% increase from the ceiling price. Based on the SCAMHP proposal, the Authority deliberated the cases of upward price revision of 13 drugs comprising 27 formulations under Paragraph 19 of the DPCO 2013 at its 89th Authority meeting.

After extensive consideration, the authority rejected the case of 6 drugs with 11 formulations and deferred the case of 4 drugs with 7 formulations for further review. It observed that the remaining three drugs, comprising nine formulations, that are being evaluated for upward price revision under Paragraph 19 of the DPCO 2013, are low-cost pharmaceuticals that have been subject to price controls for many times.

The Inter-Ministerial Committee constituted for examination of cases under Para 19 of DPCO 2013 has examined the representations and observed that the formulations of the three drugs are essential medicines for public health management and the pricing of these should not be the reason for shortage and unavailability of these medicines, and accordingly recommended upward revision of prices under Para 19 of DPCO 2013.

In its recent meeting, NPPA deliberated upon the case of upward price revision of the formulations of these drugs under para 19 of DPCO 2013 and noted,

"The scheduled formulations being considered for upward price revision under para 19 of DPCO 2013 are low priced drugs and have been under repeated price control. These drugs are used as the first line of treatment and are important to the public health programs of the country. Further, the mandate of NPPA is to ensure the availability of drugs at affordable prices and it was noted that while ensuring affordability, access can not be jeopardized and life-saving essential drugs must remain available to the general public at all times. Therefore, the NPPA is of the considered view that the unviability of these formulations should not lead to a situation, where these drugs become unavailable in the market and the public is forced to switch to costly alternatives."

"NPPA is cognizant that as per the prevailing policy, cost based pricing is not feasible. To address the situation arising due to repeated price control, a one-time price increase of 50% from the present ceiling price is being considered in the public's interest as an exceptional measure, as advised by SCAMHP. Accordingly, NPPA invokes extra ordinary powers in the public interest under para 19 of DPCO 2013 for upward revision of the ceiling prices of the nine scheduled formulations of 3 drugs by giving one time increase of 50% from the present ceiling price," it added.

In view of the foregoing reasons, NPPA, in exercise of extra ordinary powers in public interest, conferred by paragraph 19 of the Drugs (Prices Control) Order, 2013, read with S.O. No. 1394(E) dated the 30th May, 2013 issued by the Government of India in the Ministry of Chemicals and Fertilizers, and in supersession of the Order(s) of the Government of India in the Ministry of Chemicals and Fertilizers (National Pharmaceutical Pricing Authority) S.O. Number and date specified in column no. 6(a) & 6(b) mentioned in the table below, the National Pharmaceutical Pricing Authority, has fixed the prices as specified in column (5) of the Table below as ceiling prices exclusive of Goods and Services Tax applicable, if any in respect of the Scheduled formulations specified in the corresponding entry in column (2) of the said Table with the dosage form & strength and unit specified respectively in the corresponding entries in columns (3) and (4) thereof:

The gazette further added,

(a) All manufacturers of scheduled formulation, selling the branded or generic or both the versions of scheduled formulations at a price higher than the ceiling price (plus Goods and Services Tax as applicable) so fixed and notified by the Government, shall revise the prices of all such formulations downward not exceeding the ceiling price specified in column (5) in the above table plus Goods and Services Tax as applicable, if any.

(b) The provisions of para 13(2) of DPCO 2013 would not be applicable on the ceiling price specified in column (5) in respect of the formulations with dosage & strength mentioned in column (2) and (3) respectively.

(c) The manufacturers may add Goods and Services Tax only if they have paid actually or if it is payable to the Government on the ceiling price mentioned in column (5) of the above said table.

(d) The ceiling price for a pack of the scheduled formulation shall be arrived at by the concerned manufacturer in accordance with the ceiling price specified in column (5) of the above table as per provisions contained in paragraph 11 of the Drugs (Prices Control) Order, 2013. The manufacturer shall issue a price list in Form–V from date of Notification as per paragraph 24 of the DPCO, 2013 to NPPA through IPDMS and submit a copy to State Drug Controller and dealers.

(e) As per para 24(4) of DPCO 2013, every retailer and dealer shall display price list and the supplementary price list, if any, as furnished by the manufacturer, on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same.

(f) Where an existing manufacturer of scheduled formulation with dosage or strength or both as specified in the above table launches a new drug as per paragraph 2 (u) of the DPCO, 2013 such existing manufacturer shall apply for prior price approval of such new drug to the NPPA in Form I as specified under Schedule-II of the DPCO, 2013.

(g) The manufacturers of above said scheduled formulations shall furnish quarterly return to the NPPA, in respect of production / import and sale of scheduled formulations in Form-III of Schedule-II of the DPCO, 2013 through IPDMS. Any manufacturer intending to discontinue production of above said scheduled formulation shall furnish information to the NPPA, in respect of discontinuation of production and / or import of scheduled formulation in Form-IV of Schedule-II of the DPCO, 2013 at least six months prior to the intended date of discontinuation.

(h) The manufacturers not complying with the ceiling price and notes specified hereinabove shall be liable to deposit the overcharged amount along with interest thereon under the provisions of the Drugs (Prices Control) Order, 2013 read with Essential Commodities Act, 1955.

(i) Consequent to the issue of ceiling price of such formulation as specified in column (2) of the above table in this notification, the price order(s) fixing ceiling or retail price, if any, issued prior to the above said date of notification, stand(s) superseded.