Plea to address span of control issues in new drug policy

The Indian Pharmaceutical Alliance (IPA) has a few issues relating to the ‘span of control' in the draft National Pharmaceutical Policy (NPP) 2011.

IPA Secretary General D. G. Shah said the draft policy stated that the ‘span of control' was likely to go up to 60 per cent. The prices of almost half the ‘essential medicines' will be reduced by 5-80 per cent and the other half by 5 per cent.

The IPA estimates that domestic price reductions alone will result in about Rs 3,000 crore loss in sales to the domestic industry where the players have contributed 95 per cent of increase in gross fixed assets and 77 per cent of R&D expenditure in the industry in the last 15 years.

However, IMS Health data show that the ‘span of control' can effectively be as high as 75 per cent — more than four times the current ‘span of control' and more than twice the ‘span of control' as per the National List of Essential Medicines (NLEM), 2011.

It will, in effect, bring an additional 1,154 drugs and 6,441 formulations under price control as against the Drug Price Control Order (DPCO), 1995, of 38 drugs and 800 formulations with an 18 per cent ‘span of control'. “The proposed additions will enlarge the scope of price regulation by over eight times the current volume to about 68,000 packs, making the task unwieldy and ineffective. ,'' said Mr. Shah.

With an enlarged ‘span of control', the domestic manufacturers can shift investment outside India as they have facilities all over the globe. “Importantly,'' according to Mr. Shah, “large domestic companies, which contribute around 81 per cent of total pharma exports, earn an average 50 per cent of their revenues from exports. The price reductions in the country will have an impact on export price realisation also as all importing countries check domestic prices.''

The IPA has suggested that to ensure a sustainable supply of essential medicines, the policy should stay with the NLEM 2011 list, which covers 348 drugs and 654 formulations with a ‘span of control' of 30 per cent.

In a bid to balance consumer interest and the pharmaceutical industry's growth, the government is considering plans to increase its procurement of essential medicines by 7-8 times from the domestic industry for supply to the weaker sections of the society.

The IPA Secretary General felt the success of such a programme would hinge on the industry being able to produce huge volumes and also its ability to absorb the costs of supplying the enhanced volumes at heavily discounted rates.

Source: The Hindu

NPPA to launch SMS helpline to give options to consumers for buying cheaper brands

The Department of Pharmaceuticals (DoP) in collaboration with the National Pharmaceutical Pricing Authority (NPPA) will soon roll out an SMS-based helpline to help the consumers to choose the cheapest available drug.

The NPPA has launched the exercise for this ambitious programme, which has been mooted for long to make available the affordable drugs to the consumers and thereby indirectly influencing the market prices through transparent competition.

The NPPA has called for expression of interests from the interested agencies to set up and run the helpline. The consumer can send the brand name of a prescribed drug in text message and will get a list of brands of the same medicine along with their prices for choosing the cheapest brand.

The move is initiated after the NPPA had found that there were huge differences in the prices of different brands of the same medicines. In some cases, expensive brands are ten times higher than the cheapest available alternative brand of the same medicine. And the consumers do not have options, as they are not aware of the brands other than what is prescribed by the doctors. This SMS service is aimed at helping out the consumer on this count, sources said.

“In order to enable the consumers to know the latest market price of the medicines through SMS, NPPA intends to start all India SMS helpline service for consumers. Expression of Interest (EoI) is invited from eligible companies/firms/agencies having sufficient experience, infrastructure and access to MRP of all the medicines available and sold in various parts of India,” according to the notification by the NPPA.

“To provide instant information through SMS (in 160 characters) reply on the latest market price of various generic and branded medicines of the same salt available in the area of the queerest on receipt of SMS query from the consumers. If the query is for the price of a specific brand the SMS reply be for the latest MRP of the said brand in that area. In case the query is for the cheapest medicines without specifying any name subject to space availability the service provider will provide at least five cheapest prices of generic medicines and five cheapest prices of branded medicines,” according to the scope of work specified in the notice.

The company/firm/agency should have three years experience of providing this type of services. The company/firm/agency should have access to latest market price of all the generic and branded medicines available and sold in various parts of the country including in the remote areas. The company/firm/agency should have the ability to track and update the new generic and branded medicines prices at least on quarterly basis to give the most relevant SMS reply considering the latest updated MRP prevailing in the area of the queerest, it said.

NPPA update on Overpricing

The outstanding arrears by pharmaceutical companies on the grounds of overcharging continued to increase steadily with Cipla remaining the leader of the pack, even as the recovery attempts by the National Pharmaceutical Pricing Agency (NPPA) did not improve in proportion to the rise in the arrears.

According to the latest list published by the NPPA, the agency sent out demand notices to the companies in 804 cases for a total recovery of Rs.2350.28 crore till May 31. The total recovered amount stood at Rs.210.20 crore, since the inception of the price monitoring agency.

Though all the major pharma companies find their way in the default roaster, Cipla Ltd continued to lead the tally with a total of nearly Rs.1400 crore, which accounted for more than 60 per cent of the total dues owed by the entire pharma industry of the country. Sources said most the cases with Cipla are in the courts still. Big companies figured in the list included Cadila, Ranbaxy, Dr Reddy’s Lab, Pfizer, GlaxoSmithKline and Merck.

During the last four months, the NPPA has sent notices in 18 cases, demanding over Rs.22 crore. The recovery during this period stood merely at Rs.2.14 crore. According to the previous compiled list as on January 31 this year, the total number of cases were 786 and the total arrears were Rs.2328.52 crore. The total amount recovered by the end of January was Rs.207.86 crore.

Till October 31, 2010, the total arrears were Rs.2208 crore, thus arrears grew by Rs.142 crore in the six months whereas the recovery was to the tune of Rs.8 crore during the same period. The NPPA has intensified efforts to recover the outstanding arrears in the recent years. As part of the measures, the NPPA has also started referring overcharging cases to district collectors of concerned States for revenue recovery.

NPPA revises prices of 258 formulations, 5 bulk drugs

The National Pharmaceutical Pricing Authority (NPPA) has revised the prices of 258 formulations, with nearly 70 of them including the drugs for diabetes and tuberculosis going up. The price regulator, however, decreased the prices of two bulk drugs while hiking up the rate three other bulk drugs.

According to the notification by the NPPA, the prices of 258 formulations were revised and most of the drugs gone costlier belonged to the diabetes and TB therapeutic areas. The prices of insulin-based formulations by the domestic manufactured have increased in the range of 5-18 per cent. The prices of a good number of formulations also came down while prices of over 20 drugs remained unchanged. The authority has also fixed the price fixation parameters for non-PVC bags with oxygen barrier properties. The conversion cost, packing charges, packing material cost and process loss that will be calculated for fixing the prices of such bags will now be known to the industry.

In another move, the NPPA has fixed the price of Abbott’s Gardenal Syrup 60 ml at Rs.39.60 and given the company 15 days time to revise its price tag. The epileptic drug of Abbott Healthcare was fixed on the ground that the company had increased the price of this medicine by over 10 per cent between August 2007 and August 2008. The regulations allow drug companies to increase the prices of medicines (that are normally out of price control) up to 10 per cent during a 12-month period.

The price of bulk drug Salbuamol Sulphate was brought down to Rs.3633 per kg from Rs.4478 fixed earlier in 2008. Likewise, the price of Spironolactone was reduced from Rs.29601 to Rs.28859 by the NPPA. However, in the case of Pheniramine Maleate, the price went up to Rs.1330 from Rs.1168 per kg and rate of Pyrantel Pamoate increased from Rs.1182 to Rs.1278 per kg. The price of Chlropropamide, the other bulk drug under revision, however stood unchanged at Rs.326 per kg, as per the notification.

National Pharmaceutical Pricing Authority (NPPA) slaps fine on Cipla for overpricing

National Pharmaceutical Pricing Authority (NPPA) has issued notices to Cipla for overpricing of two drugs demanding an amount of Rs 47.70 crore in respect of the drug Salbutamol and an amount of Rs 25.46 crore in respect of the drug Ciprofloxacin.

The total estimated overcharged amount, including interest, by various pharma companies since the inception of the NPPA in 1997 is a whopping Rs 2,208.35 crore. But so far, the Authority could recover a paltry Rs 202.20 crore from this and is fighting litigations in various courts with the companies to recover the rest of the sum.