New Delhi: The Department of Pharmaceuticals (DoP) has accepted the review petition of Biological E Limited against price fixation of Tetanus Toxoid Vaccine by the National Pharmaceutical Pricing Authority (NPPA).
In its decision, DoP ordered NPPA to refix the ceiling prices of the vaccine on merit, separately for 0.5 ml ampoules and 5ml vials.
Tetanus Toxoid Vaccine is given to provide protection (immunity) against tetanus (lockjaw)in adults and children 7 years or older. Vaccination is the best way to protect against this life-threatening disease. Vaccines work by causing the body to produce its own protection (antibodies).
Biological Ltd, in its petition, contended that DoP directed NPPA to fix the MRP of the vaccine separately for 0.5ml ampoules and 5 ml vials by considering the market price of May 2012 and September 2013 of those companies having a market share of more than 1% of the moving annual turnover.
In order to facilitate the process of the data collection and to arrive at a correct ceiling price, the company made a voluntary submission on 26.06.2018, wherein it provided market data of May 2012 and September 2013 for 0.5ml ampoules and 5.0ml vials. According to data, the Price to Retailer( PTR) for 0.5 ml ampoules was Rs 8.85 and for 5.0 ml vials was Rs 20.08.
However, the company before the DOP contended that the PTR was not considered by pricing authority based on the data submitted by the applicant. In the calculation sheet published by NPPA on 13.11.2018, the base PTR of the company considered by NPPA for Tetanus Toxoid 0.5ml ampoules is Rs 7.72 and 5.0ml vials is Rs 16.63 which is not correct.
The petitioner further contended that that NPPA does not have the power to fix the ceiling price of Tetanus Toxoid Vaccine. As per para 4 of DPCO, the NPPA only has the power to fix the ceiling price of scheduled formulations of specified strength and dosages as specified under the First Schedule. As no strength or dosage is fixed for Tetanus Toxoid vaccine, the NPPA does not have the jurisdiction to fix the ceiling price of the same.
Furthermore, the company objected to the methodology adopted by NPPA and stated that the averaging of the invoiced packs along with the free packs are not supported by the Page 2 of 3 DPCO, which states that actual Price to Retailer (PTR) ought to be considered and not the average based on taking ‘zero’ as the PTR for free packs.
The company also stated that NPPA has only considered one random invoice out of the almost 1500 invoice summaries submitted by the applicant for the month of May 2012 with respect to the 0.5ml ampoules. NPPA has not even considered the PTR of highest count.
Replying to the contentions, NPPA said that to implement the direction given in review order No.31015/27/2017-Pricing, dated 08.06.2018, the ceiling price of 0.5ml ampoules was fixed at Rs 9.95 and for 5.0ml vials at Rs 21.43 by considering the data submitted by M/s Serum Institute of India Limited and M/s Biological E Limited.
M/s Biological E limited had submitted that they invoiced 16000 vials, where the company charged for 14540 vials at Rs 8.50 and 1460 vials are given at free of cost. Considering this, the average PTR is 7.72 per vials. (14540×8.5/16000 = 7.72 per vial). Hence, there is no error in the PTR, considered by NPPA for the company.
In response to the point raised by the petitioner regarding the power to fix the ceiling price of Tetanus Toxoid Vaccine, NPPA said,” the ceiling price of the formulation was fixed considering para 4 of DPCO and the policy adopted by the Authority.”
During the examination, DOP observed that as regards the grievance of the company about not considering their relevant data, NPPA stated that the company had submitted that they invoiced 16000 ampoules, where the company charged for 14540 ampoules at Rs 8.50 and 1460 ampoules are given at free of cost. Considering this, the average PTR is Rs 7.72 per ampoule.
However, NPPA did not upload the draft working sheet for clear 10 working days as per the department’s standing instructions and the applicant company was not given any opportunity to object to the methodology used by the pricing authority before NPPA issued the ceiling price notification. The pricing authority should have complied with the government’s standing instructions on this issue.
Giving the observations, DoP directed NPPA to refix the ceiling price of Tetanus Toxoid Vaccine de novo, on merit, separately for 0.5 ml ampoules and 5ml vials.