How to discontinue with scheduled formulations: NPPA issues draft guidelines for pharma

New Delhi: The apex drug pricing regulator, National Pharmaceutical Pricing Authority (NPPA) has formulated Draft Guidelines formulated for dealing with cases of discontinuation of Scheduled formulations under para 21 (2) of DPCO, 2013. The authority has directed drug manufacturers to send suggestions or comments on Draft Guidelines by June 15, 2020, to the NPPA office or email at monitoring-nppa@gov.in.

Paragraph 21 of the Drug (Prices Control) Order, 2013 provides for monitoring the availability of scheduled formulations. In this regard, manufacturers of scheduled formulations and the active pharmaceutical ingredients contained in the scheduled formulations are required to furnish the information in respect of production and sales data of such drugs in Form-III of Schedule II as stipulated in paragraph 21(1) of DPCO, 2013 on a quarterly basis.

Paragraph 21(2) of the DPCO,2013 provides that any manufacturer of scheduled formulation, intending to discontinue any scheduled formulation from the market shall issue a public notice and also intimate the Government in Form-IV of this order in this regard at least six months prior to the intended date of discontinuation.

According to the draft guidelines, the government may in public interest direct the manufacturer of the scheduled formulation to continue with the required level of production or import for a period not exceeding one year from the intended date of such discontinuation within a period of 60 days of receipt of such intimation.

Taking the above into consideration, the NPPA will be approved the following guidelines to deal with intimations received in Form-IV (Schedule-II of DPCO, 2013) for discontinuation of production/import of scheduled formulations under Paragraph 21(2) of the DPCO, 2013. 

In cases where the company intends to discontinue scheduled formulation has not issued a public notice, it will be directed to issue such public notice in the attached formats in at least two national newspapers (one in English and one in Hindi newspaper). The date of discontinuation shall be treated six months from the date of a public notice, further subject to 3.2 to 3.6 of these guidelines.

Moreover, to ensure that there is no shortage of the formulation during this period, based on the company's moving annual turnover (MAT) in the unit, wherever it is less than 10 per cent to 12 per cent, manufacturers will be directed to continue production/import and sale of the formulation for the period of six and nine months respectively.

The draft has also defined the timelines for wherever MAT in units formulations are in the market for less than 25 per cent, more than 25 per cent and more than 40 per cent.

NPPA may also consider an application for upward price revision under Para 19 if the formulation is proposed to be discontinued on account of non-remunerative pricing, a ground that needs to be established by the manufacturers.

Notwithstanding provisions of Paras 3.1-3.5 above, whenever a formulation is found to be critical for public health, based on circumstances and also in cases where it is established, that the company is intending to discontinue production/import and sale of a scheduled formulation and has already launched or intends to launch 'a new drug' to evade price NPPA will refer such cases to Committee for exercising powers under Para (3) of the DPCO, 2013 to ensure supply of such formulations for such period as it considers necessary, which provide as under:

"With a view to achieve adequate availability and to regulate the distribution of drugs, in case of emergency or in circumstances of urgency or in case of non- commercial use in the public interest, Govt. may direct any manufacturer of any act/ve pharmaceutical ingredient or bulk drug or formulation to increase /he production and to sell such active pharmaceutical ingredient or bulk drug to such other manufacturer(s) of formulations and to direct formulators to sell the formulations to institutions, hospitals or any agency as the case may be"

Exemption from any condition prescribed in these Guidelines for discontinuation of scheduled formulations may be considered, e.g., in cases of unforeseen situations which are beyond the control of manufacturers/importers, cases in which import license gets expired or marketing/distribution agreement between the manufacturer importer and marketing company gets terminated prior to the period of six/nine/twelve months for which Company is asked to continue production/import and sale beyond the intended date of discontinuation. Such exemption may be approved by Chairman, NPPA.

The provisions of these guidelines are applicable to scheduled formulations only. All Form-IV intimations for discontinuation of medical devices, which are part of NLEM and Schedule-I of DPCO, 2013, shall be put up before the Authority. Such cases shall be examined on a case-to-case basis.

These guidelines will be effective with immediate effect and be applicable to al( cases under consideration and future cases.)

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