DoP rejects Biocon plea to review ceiling price of Trastuzumab injection

The Department of Pharmaceuticals (DoP) has rejected a review petition filed by Biocon Limited against the price fixation of Trastuzumab Injection - 400mg/50ml - 400mg/50ml saying that applying the factor of 0.95905 by NPPA while revising the ceiling price of post-GST regime is in order.

NPPA had revised the price of Trastuzumab Injection-440mg/50ml to Rs. 54,582.25 per pack which was challenged by the petitioner contending that the price had been revised by applying the factor of 0.95905 and the use of multiplication factor is incorrect and untenable since the said product was exempted from excise duty applicable as on 31.08.2015.

Biocon Limited had filed a petition under paragraph 31 of the Drugs (Prices Control) Order, 2013 against notification S.O. No.2058(E) dated 30.06.2017 issued by the National Pharmaceutical Pricing Authority (NPPA) against fixing the ceiling price of Trastuzumab Injection - 400mg/50ml - 400mg/50ml.

To authenticate its claim, the company quoted an NPPA office memorandum which states that “in case of schedule formulations which are exempted from excise duty, no multiplication factor would be applicable. The existing ceiling price would be the ceiling price exclusive of GST rates as applicable.”

The petitioner had also stated that NPPA had asked them to provide a list of such schedule formulations with excise duty exemption along with the relevant excise duty notification applicable as on 31.08.2015. The company submitted a copy of notification no. 12/2012-Custom dated 17.03.2012 in support of their claim.

The petitioner had also requested the DoP to pass a speaking order in the matter to rectify the Ceiling Price of Trastuzumab injection 440 mg/ 50 ml to Rs. 56, 912.83 exclusive of GST by applying a multiplication factor of 1 instead of 0.95905.

However, during the proceedings, NPPA stated that the price fixation has been done strictly in accordance with the provisions of DPCO, 2013. Custom vide its notification no. 6/2016- Customs dated 28.01.2016 removed the excise exemption of Trastuzumab Injection-440mg/50ml based formulation. To give the effect of GST with effect from 01.07.2017, NPPA revised the ceiling price of Trastuzumab Injection-440mg/50ml base formulations by removing the excise components vide S.O. 2058(E) dated 30.06.2017. This revision of ceiling price was based on the earlier notification no. 1039(E) dated 01.04.2017 during which period also the excise exemption was not applicable (since the exemption has been withdrawn from 28.01.2016). Thus, the contention of the company is not tenable.

At the time of examination of the case, the DoP noted that when the original ceiling price was notified, the calculation was based on August 2015 data when the formulations were excise exempted. In January 2017, excise duty was first made applicable on the aforesaid formulations. During the implementation of GST in June 2017, NPPA reduced the ceiling price to provide an effect for removal of excise duty without citing any provision under DPCO 2013 which allowed for such a reduction in the Ceiling Price of Scheduled formulations due to a reduction in Excise Duty.

Giving the decision, DoP stated, “Levy of or exemption from any duties (excise/custom) has no bearing on fixation or revision of ceiling prices under the provisions of DPCO, 2013. The ceiling prices are fixed on market-based data and not on cost-based data. Any plea for revision/refixation of ceiling prices on account of any modification in the applicable duty rates is not tenable under the provisions of DPCO, 2013. Applying the factor of 0.95905 by NPPA while revising the ceiling price of post-GST regime is in order. Hence, the request of the company cannot be considered and the review application stands rejected.”

Below is the attachment for the same.