DOP directs NPPA to refix the ceiling price of Gentamicin based on Abbot application
Abbott demanded to correct the anomaly of Gentamicin Injection 40mg/ml 2ml pack by fixing Ceiling Price using the September 2013 data as base data and applying the WPI for the subsequent years.
New Delhi: Through a recent review order the Department of Pharmaceutical(DOP) has directed the National Pharmaceutical Pricing Authority (NPPA) to re-fix the ceiling price of Gentamicin-40mg/2ml pack size by considering September 2013 market-based data instead of that of August 2015 and apply the WPI for the subsequent years.
The decision came in response to a review application that was filed by Abbott Healthcare Private Limited against the NPPA order that fixed the ceiling price of their formulation Gentamicin-40mg/ml 2ml pack. Abbot requested DOP to correct the anomaly of Gentamicin Injection 40mg/ml 2ml pack by directing the NPPA to re-notify the Ceiling Price of Gentamicin Injection 40mg/ml 2ml by fixing Ceiling Price using the September 2013 data as base data and applying the WPI for the subsequent years.
The company contended that the ceiling price for Gentamicin Injection 40mg/ml 2ml Pack was notified by NPPA at Rs 4.58 under NLEM 2011 which was based on per ml average and had incorrectly included various packs of different sizes in the same basket - 2ml, 10ml, 20ml and 30 ml.
This resulted in a situation where the ceiling price of 2ml went below its production cost while for 20 ml manufacturers; there was a scope of a windfall price increase.
The company pointed out that this being an injection, packaging cost plays an important role in the total cost of the product. Hence per/ml cost in a 20 ml multi-dose vial will always be lesser than that of per/ml cost in a 2 ml pack. While the cost of API and excipient goes up in linear proportion, the packaging cost does not go up in linear proportion. Hence taking an average of per/ml cost for determining the ceiling price was evidently incorrect at that juncture.
Responding to the allegations NPPA stated that the ceiling price of Rs. 4.47/Pack (2ml) for Gentamicin 40mg/ml each 2ml pack Injection was notified vide S. O. 248(E) dated 24.01.2017 as per para 4, 10, 11, 14, 16, 17, & 18 of DPCO, 2013.
The regulatory body further added that Abbott has stated that the correct methodology was not followed in arriving at the ceiling price for Gentamicin 40mg/ml each 2ml pack Injection. The points raised by the applicant are not relevant. Price fixation has been done strictly in accordance with the provisions of DPCO, 2013. Details are as under:
| Applicant’s Grievances | NPPA’s comments |
| Applicant has pointed out that NPPA has a fixed ceiling price of Rs. 2.18/ml vide S.O. 1157(E) dated 28.4.2014. NPPA has included various packs of different sizes in the same basket – 2ml, 10ml, 20ml & 30ml to derive PTR based on per ml basis, therefore, ceiling price worked out went below its production cost for a 2ml pack. | NPPA has rightly fixed ceiling price of Rs. 2.18/ml vide S.O. 1157(E) dated 28.4.2014 as per the provisions of DPCO 2013 under NLEM 2011. There was no provision for working out the separate ceiling price for various packs before the existence of S.O. 1192(E) dated 22.3.2016, under NLEM 2015. |
| Applicant has pointed out the impact of packaging cost in the total cost of the product and stated that consideration of cost per ml base to derive the ceiling price is incorrect. | NPPA has followed the market-based pricing exercise as there is no provision in DPCO, 2013 to consider cost base pricing exercise |
| Applicant requested separate ceiling price for single dose and multi-dose | NPPA has followed the directions of DOP as well as Committee of Experts (COE) under para 11(3 & 4) and separate ceiling price has been fixed for different packs. |
| Applicant has requested to consider May 2012/ September 2013 data for working out the ceiling price | Applicant request is not acceptable as it is against the Para 9 (5) of DPCO, 2013. |
| Applicant has stated that they have submitted the representation against draft working calculation to fix ceiling price (vide O.M. 8(34)/2016 dated 12.8.2016 and same was not considered by NPPA. | The representation of the applicant was not considered an applicant did not submit the complete/legible documents required as per O.M. No. 8(34)/2016/DP/NPPA–Div.II dated 12.8.2016, 10.10.2016 & letter no. 7(34)/2016/DP/NPPA–Div.II dated 16.01.2017. |
| Applicant has stated that NPPA has only partially corrected the problem of an abnormally low price of the retail pack of 2ml. | DPCO, 2013 does not differentiate between low and high price NPPA has fixed the ceiling price as per the provisions of DPCO, 2013. |
| Applicant has again repeated the same request i.e. to consider the September 2013 data as based price for arriving at the ceiling price coupled with applicable WPI for subsequent years. | Applicant’s request is against the provisions of DPCO, 2013. |
Examining the matter, the DOP noted that there is merit in the contention of the applicant that in peculiar circumstances of the case, considering August 2015 data has resulted in a situation where the ceiling price of Gentamicin-40mg/2ml pack size went below its production cost. This anomalous situation needs to be rectified in the interest of the long term sustained availability of Gentamicin-40mg/2ml pack size in the market. This could be justifiably rectified if the segregated market data of September 2013 is used to arrive at a ceiling price along with giving effect to WPI for subsequent years.
After examining the entire matter the DOP directed,
NPPA is hereby directed to re-fix the ceiling price of Gentamicin-40mg/2ml pack size by considering September 2013 market-based data instead of that of August 2015 and apply the WPI for the subsequent years. Issued on this date of 10th day of January 2019.
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