NPPA to fix retail price of certain off-patent FDCs based on market data
The National Pharmaceutical Pricing Authority (NPPA) has decided to fix the retail price of certain anti-diabetic fixed dose combinations (FDCs) containing dapagliflozin, vildagliptin and sitagliptin, which went off-patent in the recent past, based on market database, under the provisions of the Drugs (Prices Control) Order, 2013.
The decision was taken in a recent meeting of the Authority, after observing that even though one year has not passed since the first price notification on these drugs, the prices started appearing in the market database.
The decision is significant, in the light of the amendment made in the DPCO, 2013 on May 11, 2023, adding specific provisions with regard to the fixation of retail price of a new drug or a new drug that contains molecules or components or ingredients that have become off-patent or about to become off patent.
The Authority was looking into the applications for fixing retail price for the FDCs of dapagliflozin 10 mg+vildagliptin 100+metformin SR 500 mg and sitagliptin 100 mg+pioglitazone 15 mg+ metformin SR 500 mg/1000 mg for which market data is available. The retail prices of these FDCs were first fixed by the NPPA in the 109th meeting held on February 24, 2023 and 114th meeting held on June 19, 2023, respectively.
As per the provisions of Para 5(3) of the DPCO, which was inserted into the Order in May, last year, in case retail price fixation of a new drug or the new drug that contain molecules or components that have become off-patent or about to become off patent, if the market-based data is available, the prices are to be fixed as per provisions of Para 5(3)(i) by calculating 50 per cent of prices fixed under para 4(1).
However, according to Para 5(3)(ii) of the same amendment, after one year from the date on which the retail price was fixed as per Para 5(3)(i) or the date on which the price to retailer (PTR) of at least one company fixed under the sub-para is captured in the pharmaceutical market database, whichever is later, then their retail prices are to be fixed as per the methodology for calculation of prices in regular cases, excluding patent or license holder prices.
The Authority, while considering the matter, noted that although one year has not elapsed since the price notification of these FDCs, the prices of these FDCs have started appearing in the market database. However, the prices appearing are only of those manufacturers for whom the retail prices were fixed by NPPA by applying 50% reduction and the prices of the patent holder or license holder are not appearing in the market database.
The Authority observed that if the prices are fixed under Para 5(3)(i), then prices shall be further reduced by 50% from the prices that have been fixed by the NPPA after applying 50% reduction earlier. After detailed deliberations, it decided that the retail price of these formulations may be fixed based on the market database excluding patent or license holder, if any, under provisions of the Para 5(3)(ii) of the DPCO, 2013.
The price fixation of generic FDCS of drugs such as sitagliptin and linagliptin which went off-patent in the recent years, has been an evolving process for the pricing authority, and the discussions within the Authority meetings related to this started atl the least in 2022. In the first half of 2022, the NPPA fixed the prices of sitagliptin and linagliptin with a 50 percent reduction on the patented component. The same methodology was accepted while fixing the prices for some of the other drugs, which also went off patent following this.
The methodology was developed by the Multi Disciplinary Committee (MDC) of Experts for NPPA considering that if the retail price is calculated based on six month prior market data, the price of the patented period would be taken into consideration and the benefit of price reduction due to medicines which become off-patent would not pass on to the consumers. The Committee opined that the price of drugs be reduced so as to pass the benefit of price reduction to the consumers.
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