DoP rejects Bharat Serums and Vaccines’ review petitions on ceiling price fixation of Hucog HP
The Department of Pharmaceuticals (DoP) has rejected review applications filed by the Maharashtra-based Bharat Serums and Vaccines Ltd against National Pharmaceutical Pricing Authority (NPPA) fixing the ceiling price of its infertility treatment drug brand Hucog HP, since the company did not file the petition within the prescribed time limit.
The ceiling price fixation of the drug was part of NPPA’s effort to address an anomaly in the high interbrand variations within the same company while fixing the ceiling prices of new scheduled drugs which were brought into the Schedule I of the Drugs (Prices Control) Order (DPCO), 2013, which consists of National List of Essential Medicines (NLEM), 2022.
Bharat Serums and Vaccines filed a petition against the notification in respect of Hucog HP 10000IU injection 1’s containing Human Chorionic Gonadotropin hormone 10000IU, and against the price fixation of Hucog HP 2000 IU Injection 1’s containing Human Chorionic Gonadotropin hormone 2000IU, on May 12, 2023.
The DoP, in two separate order for the two strengths of the drug, said that under the Paragraph 31 of the DPCO, any person aggrieved by any notification issued or order made under Paragraphs 4, 5 and 6 of this Order, may apply to the Government for a review of the notification or order within a period of thirty days of the date of publication of the notification in the Official Gazette of the receipt of the order by him, as the case may be, and the Government may make such order on the application as it may deem proper.
The Department added that Bharat Serums and Vaccines has filed the review petition on May 12, which is more than 30 days after the notification of the NPPA.
“As the petition has not been submitted within the time limit prescribed in paragraph 31 of the DPCO, the same is rejected,” said the review order.
Hucog HP, according to Bharat Serums and Vaccines, is the only liquid stable HCG in India and is a time tested quality product. In the female, the drug is used in treatment of anovulatory infertility where its administration would form part of a recognised treatment regimen involving prior stimulation of follicular maturation and endometrial proliferation. In male, the drug stimulates the interstitial cells of the testes and consequently the secretion of androgens and the development of secondary sexual characteristics.
NPPA, fixed the ceiling price of the 10000 IU injection price for the drug at Rs. 928.24 per vial including the 12.1218 per cent increase in the prices owing to the implementation of Wholesale Price Index (WPI) calculation, from April 1, 2023. For the 2000IU injection of the scheduled formulation, the ceiling price was fixed at Rs. 343.64 including the WPI implementation.
The NPPA fixed the ceiling price of 27 scheduled formulations through the notification, in order to bring clarity in price fixation of certain new formulations added to the revised Schedule I, as there was high interbrand variation within the same company. It said that in few cases, the same formulation of one company is having multiple prices for various brands with price variation even upto 1000 percent. Since these formulations were non-scheduled formulations under the NLEM, 2015, ceiling prices were not applicable and companies were at liberty to fix the prices of such formulations.
The NPPA notification on March 31, fixing the ceiling prices, said, “Whereas, the same formulation of one company having multiple prices for different brands and brands having inbuilt margins and high profits coupled with information asymmetry in the pharmaceutical sector, make many drugs beyond the reach of common man and also lead to financial burden/impoverishment. This is an extraordinary situation leading to market failure and working against public welfare. Therefore, it is essential to undertake an exercise to reduce the inter-brand price difference in the public interest in respect of schedule formulations since these formulations are considered to be essential medicines and have been included in the NLEM, 2022 for the first time and therefore, should not fall out of price control”.
As per Para 20 of DPCO, 2013, no manufacturer can increase the prices of non-scheduled formulation by more than 10% during preceding twelve months, where the increase in the prices of non-scheduled formulations is beyond 10% of MRP, the manufacturer shall reduce the same to the level of 10% of MRP for next twelve months. Thus, Para 20 does not recognise the brand, and monitoring under Para 20 is done at the formulation level. Also, Para 20 does not differentiate the price increase of the same formulation based on the situation under which such price increase has occurred. In all situations, the manufacturer is bound to reduce the price to the level of 10%, it added.
“Such anomalies in variation in PTR of same formulations sold by same companies under different brand names is considered to be an extraordinary circumstance leading to market failure and against public welfare. Thus, the Authority after due deliberation decided that it becomes essential to undertake such exercise to remove huge inter brand/pack size price variation by capping the PTR of various brands/ pack sizes of a formulation of a particular company at price of the lowest brand/pack size plus 10%in the cases where non-scheduled formulations have come in the purview of NLEM, 2022 for the first time,” it averred.
It added that violation of the provisions of DPCO including Para 20 is not acceptable and should not form a basis for fixation of ceiling prices under NLEM, 2022. Hence, in the cases where non-scheduled formulations have come in the purview of NLEM, 2022 for the first time, if the inter-brand variation in the price of same formulation is more than 10%, the manufacturer is bound to reduce the price to the level of 10% as per the provisions of DPCO, 2013, said NPPA in the notification.
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