DoP rejects Ind-Swift’s review application on vitamin formulation Neurovit/Provita capsules
The Department of Pharmaceuticals (DoP) has rejected the review application of Ind-Swift Limited in connection to the National Pharmaceutical Pricing Authority (NPPA) fixing the retail prices of its vitamin formulation Neurovit/Provita capsules.
The Reviewing Authority under the DoP also decided that the issue related to overcharging amount imposed by the NPPA on the product does not come under the purview of the DoP.
The DoP also rejected the company’s argument that it is a Small Scale Industry (SSI) unit and is thus not mandated to approach the Government for price approval as per the Drugs (Prices Control) Order, 1995, observing that as per the NPPA order on March 2, 1995, the SSI units were required to apply to the Government within sixty days from the date of notification in case of existing notification and sixty days from commencement of production in case of new units for exemption from the Para 8 of the DPCO.
The price notified was a ceiling price notification under Paragraph 9 of the DPCO, 1995 in respect of which no exemption was available to a SSI unit.
“Once ceiling price has been notified under Paragraph 9 of the DPCO, 1995, all SSI units were covered under the said notification. Hence the issue raised by the company is not tenable,” observed the Reviewing Authority.
“The issues raised in the review application dated Mach 27, 2019, other than the overcharging issue, are devoid of merit and hence the review application stands rejected. Issue of stay on overcharging amount does not come under the purview of DoP,” concluded the DoP order on review application.
The company approached the DoP with the review petition on March 27, 2019 after receiving orders from the High Court of Punjab and Haryana at Chandigarh on February 14, 2019, which directed it to approach the Department with a review petition. The Court also granted a stay on the operation on the operation of the NPPA’s order on September 27, 2007 fixing the retail prices of the formulation and the recovery notices issued to the company.
The hearing of the review application was held in various dates during 2019 and 2020 and again in 2021 since the hearing authority changed in between.
Apart from its claim that it is not mandated to approach for price approval being a SSI unit, Indi-Swift argued that while the NPPA fixed the prices under Para 9 and!! Of the DPCO, 1995, it has not fixed the retail price under Para 8 of the Prices Order. It further argued that the formulation manufactured and marketed by the company is not a multivitamin scheduled formulation and the notified prices are not applicable to their product.
“Various salts cannot be expressed in a single rate for base element. Price derived from adjustment formula or price given in the adjustment formula for various base elements is not correct notwithstanding the fact that they cannot be included under price control,” it submitted.
NPPA, on the other hand, said that the SSI units need to apply to the Government within stipulated timeframe to get the benefit to exemption under Para 8 of the DPCO, 1995. The company did not produce any specific order exempting the product from price regulation.
It added that the Paragraph 11 of the DPCO, 1995 provides for fixation of price when the manufacture, importer of bulk drug or formulation fails to provide the requisite information for fixation of ceiling price and the company’s argument that the provision is not applicable on SSI units is wrong and misconceived. The NPPA fixed the ceiling price in public interest. The company cannot seek review of demand notice for overcharged amount issued under Paragraph 22, of DPCO and it has never submitted documentary evidence regarding overcharging by other companies, it added.
Commenting on the company’s argument on fixing prices of various salts in a single rate, the NPPA said, “For all vitamin formulations having composition within the prescribed range in Schedule V under the Drugs and Cosmetics Act, 1940, there was a need to develop a common adjustment formula for price fixation which can accommodate all the formulations. Accordingly, Authority developed and approved a formula for price fixation for aforesaid formulations.”
The reviewing authority, while refusing the petition, observed that the prices of the formulations were fixed by NPPA on Suo Motu basis in the public interest as no manufacturer had submitted any application in Form III and IV of the NPPA for fixation of the price. It also rejected the contention of the company that the prices were not fixed under Para 8 of the DPCO as not tenable. Para 8 of the DPCO provides for fixation of retail price of the scheduled formulations, while Para 9 provides for fixing of ceiling price of scheduled formulations.
It also observed that the company did not file any review application within the stipulated period of 15 days from the notification issued on September 27, 2007. NPPA initiated the overcharging case against the applicant and issued various recovery notices to the company in October and December, 2008; March and July, 2010; in May 2011 and February 2013. The points raised by the company were found not tenable during the personal hearing related to the overcharging case, it said.
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