Through a recent notification the National Pharmaceutical Pricing Authority (NPPA), Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India has issued guidelines for examination of cases of the launch of new Drugs by pharma companies without obtaining prior price approval as required under the DPCO 2013.
The NPPA had earlier begun the process of identification of new formulation launched by pharma companies on the basis of market data (Pharmatrac) without following the provisions contained in the Drugs Prices Control Order, 2013 (DPCO).
The notice states that during the course of examination of replies submitted by various companies, it has been observed that the pharma companies have not submitted the requisite document(s) to support their contention.
In order to bring clarity in the examination of cases of launch of new drugs “without prior price approvals” (WPA cases) and standardisation of documents to be submitted by the companies, it has been decided to follow a standard and uniform procedure, as mentioned in the paragraphs given hereunder, in respect of cases of launch of new drugs without prior price approval (WPA):
WPA cases will be dropped in the following cases and the Company will be duly
- The Company produces evidence (licence issued by State Drugs Controller (SDC)/ Drugs Controller General (India) (DCG(I)) and invoices and samples prior to 15th May 2013, certified by Chartered Accountant (CA) / Cost Accountant (CMA) in support of the claim that the formulation was launched before the DPCO 2013 came into effect;
- If AIOCD-Pharmatrac data confirm that the formulation was launched prior to 15th May 2013.
- If the company claims and produces sufficient evidence to support the claim that the formulation does not come under the definition of a “new drug” under paragraphs 2 (u) of the DPCO32013, i.e.,
- (i) either the Company is not an “existing manufacturer” of the scheduled formulation; or
- (ii) none of the components of the formulation is under Schedule I of the DPCO32013 as amended from time to time.
- The Company claims are duly supported by sufficient evidence i.e. samples and invoices that the formulation. is a scheduled formulation and the ceiling price is complied therewith and followed in accordance with provisions of the DPCO, 2013.
- The Company’s claim that the formulation was never manufactured/ marketed by it is confirmed by AIOCD-Pharmatrac.
- The Company has changed only the pack size and launched the new pack size(i) at a price equal to or less than the pro rata price of the previous pack size, or(ii) the increase in pro rata price if any taken by the company is in conformity with the provisions of paragraphs 20 (1) of DPCO32013. The Company will be required to submit evidence (license issued by SDC/DCG(1), invoice and sample, duly certified by CA/CMA regarding the previous and the existing pack size of concerned formulation manufactured/marketed by it.
- The Company has launched the new brand having the same composition as in earlier brand with a different brand name
- (i) at the price equal to or less than that of the earlier brand, or
- (ii) the increase in price taken by the company is in conformity with the provisions of paragraph 20 (1) of DPCO 2013.
The Company will be required to submit evidence (license issued by SDC/DCG(I) and invoice and sample, duly certified by CA/CMA regarding the previous and the existing brand of concerned formulation manufactured/marketed by it
- In cases where the brand has been procured/re-launched under a different name by another Company post-DPCO 2013, keeping the same composition of the formulation concerned as in the earlier brand (i) at the price equal to or less than that of the earlier brand, or (ii) the increase in price taken by the company is in conformity with the provisions of paragraph 20 (1) of DPCO 2013. The Company will be required to submit evidence (license issued by SDC/DCG(I) and invoice/sample, certified by CA/CMA) regarding the previous and the existing brand manufactured/marketed by it.
The notice further states that any WPA case not coming under any of the above-said categories will be referred for price fixation and, after fixing the price concerned companies shall be liable to deposit overcharged amount along with interest from the date of overcharge, in addition to the penalty, as per provisions of paragraph 15 of the DPCO, 2013.
The companies are instructed to submit the complete and requisite documents as stipulated. Companies are once again advised to check ‘new drugs’, if any, has been launched by them and obtain requisite price approval after complying with IPDMS requirements by submitting Form I prescribed in Schedule-II of DPCO, 2013, along with the documents as required by NPPA if not done earlier.
Below is the attached notification for the same