MDC recommends prices of anti-diabetic drugs with off patented molecules

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The Multidisciplinary Committee (MDC) of Experts has recommended the prices of various fixed dose combinations (FDCs) containing dapagliflozin, sitagliptin, vildagliptin, pioglitazone, among others in tune with the recent amendments made by the Department of Pharmaceuticals (DoP) in the Drugs (Prices Control) Order (DPCO), 2013 related to fixing prices of drugs with off patented molecules. The MDC has recommended prices for almost 40 applications for these drugs, in a recent meeting.

The DoP has ended the Drugs (Prices Control) Order, 2013 to include provisions by which the retail price of new drugs with ingredients that have become off-patent or about to become off-patent will be arrived at by reducing fifty percent of the price calculated as per the provisions of the price control order. Similar provision has also been notified by the DoP for the revision of ceiling price of scheduled formulation after expiry of patent issued under the Patents Act, 1970.

According to the notification, which announced the Drugs (Prices Control) Amendment Order, 2023 that came into force on the date of publication of the Order in the Gazette on May 11, 2023, the DoP has added a provision in the sub-paragraph 1 in the paragraph 5 of the DPCO, 2013.

The paragraph 5 deals with the calculation of retail price of a new drug for existing manufacturers of scheduled formulations, and the sub-paragraph 1 details that the retail price of the new drug available in domestic market shall be calculated as per the calculation step provided in the paragraph 4 of the DPCO, 2013.

Under this sub-paragraph, the amendment has added the provision that this is valid provided that the retail price of a new drug or the new drug that contain molecules or components or ingredients that have become off-patent or about to become off-patent under the Patents Act shall be fixed as per the provisions of the sub-paragraph 3 of the amendment.

It then proceed to insert the sub-paragraph three to the DPCO, which states, “the retail price of the new drug shall be arrived by reducing fifty per cent of the price calculated under sub-paragraph (1) of paragraph 4, and if the new drug is not available in the domestic market, the retail price of the new drug shall be fixed as per the provisions of the sub-paragraph (2) of this paragraph”.

The sub-paragraph (2) of the Paragraph 5, which is already present, provides that the price to retailer of a new drug, not available in domestic market, shall be fixed by the government on the principles of pharmacoeconomics of the new drug, on the recommendation of a standing committee of experts formed under the DPCO, 2013. The retail price of such a new drug shall be fixed by adding 16 per cent margin to retailer on the price to retailer, it added.

The new sub-paragraph (3), inserted through the fresh notification, further adds that after one year from the date on which the retail price was fixed as per the Order or the date on which price to retailer of at least one company fixed under the regulation is captured in the pharmaceutical market database, whichever is later, the retail price for the subsequent manufacturers shall be fixed as per sub-paragraph (1) of paragraph 4.

This is provided that while fixing the retail prices under this, the prices of the brand of the manufacturer having the patent and the manufacturer holding the permission granted by the patentee shall be excluded.

Further, the amendment added one more paragraph, 18A after the existing paragraph 18, to add that the revision of ceiling price of scheduled formulation after expiry of patent issued under the Patents Act, 1970 (39 of 1970), into the price control order.

“In the case of scheduled formulation or its molecules or components or ingredients, which are patented under the Patents Act 1970 (39 of 1970), the ceiling price, on expiry of the patent, shall be revised by reducing the present ceiling price by fifty per cent, and after one year, the ceiling price shall be revised again as per the provisions of sub-paragraph (1) of paragraph 4, based on the market data of the preceding month,” said the new paragraph.

It may be noted that the MDC, which advices the National Pharmaceutical Pricing Authority (NPPA) on pricing related matters, had earlier set a methodology under which earlier the retail price fixation of FDCs that contain molecules or components or ingredients that have become off-patent or about to become off-patent was done by reduction of 50 per cent from the patented component and then adding the ceiling price of the scheduled components as applicable for the month ending six month prior to the date of application. From the total, a reduction of 20 per cent of the lower of the two or three components was provided, drawing inference from the recommendation of the Pranab Sen Committee Report.

The method was recommended in an MDC meeting on February 23, 2023. The matter was referred to the Authority meeting and it was referred back to MDC following representation of Torrent Pharma and IPA, in March, this year.

Torrent Pharma and IPA represented that certain drugs have become off-patent two to three years back and the prices of the drugs that have become off-patent have since been reasonably reduced as compared to the patent price due to market force. They requested that a 50 per cent reduction on the prices of patented components should not have been carried out and pricing should have been done as per DPCO provisions, that is on the basis of the average price of the manufacturer having market share of more than one percent.

With the DoP moving with the amendment, the MDC did not take up the matter in the later meetings.

With the amendment, the MDC in its latest meeting said, “The Committee observed that previously there was no provision for pricing of off patent drugs in DPCO, 2013. However, now vide the above amendment, pricing of new drug or the new drug that contain molecules or components or ingredients, that have become off patent or about to become off-patent has been inserted in DPCO and the amendment also provides that the prices to retailer (including MAT) of the patent holder and the license holder of the patent shall be excluded while fixing the price of such new drugs”.

Based on this, the MDC has recommended prices for 18 applications of dapagliflozin + vildagliptin + metformin including two recommended in 49th MDC meeting and referred back by the Authority; six applications of dapagliflozin + sitagliptin + metformin including two recommended in the earlier meeting and referred back by the Authority; and two applications of sitagliptin + pioglitazone + metformin.

In respect of 14 applications of vildagliptin + metformin including 12 recommended in 49th MDC meeting and referred back by the Authority, it said that the prices are calculated considering the data of off patented compound – vildagliptin – six months prior to the date of applications (excluding the price of patent holder and license-holder) since vildagliptin became off patent in December, 2019.

Source : http://www.pharmabiz.com/NewsDetails.aspx?aid=159607&sid=1

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