ET Bureau Updated: Dec 16, 2019, 08.31 PM IST

NEW DELHI: Sun Pharmaceutical Industries, Abbott, AstraZeneca, Lupin and other big drugmakers have come under the scanner of India’s drug pricing watchdog for excluding products from the price control regime without first applying for such an exemption, according to documents that ET has seen and people with knowledge of the matter. This is in violation of the Drug Price Control Order (DPCO).

The National Pharmaceutical Pricing Authority (NPPA) has found that companies such as Lupin and Boehringer Ingelheim, apart from those mentioned above, launched products bypassing the regulatory framework.

The NPPA noted that these drug companies had launched anti-diabetes drugs under para 32 of the DPCO, without submitting the requisite application. This allows the NPPA to exempt certain classes of drugs from price control for a period of five years. It says that the price cap won’t apply if a new drug is developed through a unique and indigenous process, is patented under the Indian Patents Act and is not produced elsewhere. Taking strong objection to “self-invoking” of para 32 of DPCO 2013, the authority called for action against “wilful defaulters,” according to the minutes of a meeting held on December 9 that ET has seen.

Cos Asked to Provide Data

“Self-invoking of para 32 of DPCO 2013 would tantamount to bypassing the regulatory framework and lead to chaos in product pricing, grievously impacting choices before the hapless consumers,” said the NPPA minutes. “Such attempts need to be checked forcefully in order to safeguard public health and safety.”

“The NPPA can direct the companies to get prices fixed, fix a price and recover if it is overpriced,” said an official, one of the persons cited above.

Responding to the query, AstraZeneca said that they are fully compliant to DPCO 2013 and have been in touch with the regulatory authorities regarding the launch of these products in the markets including submission of Form V which is a price disclosure document. ”We have not received a show-cause notice or any notice seeking information on data pertaining to manufacturing, import, sales etc. of these drugs from NPPA till date”.

Rest of the companies named above didn’t respond to the queries.

The authority noted that Glenmark Pharmaceuticals Ltd had previously applied to fix the retail price of its anti-diabetes drugs RemoM and RemoZenM tablets containing remogliflozin etabonate and metformin hydrochloride. The application was withdrawn before the retail price was fixed. Glenmark subsequently launched RemoM and RemoZenM tablets containing the same ingredients without seeking exemption from NPPA.

The NPPA noted that Lupin and Boehringer Ingelheim had launched empagliflozin-metformin combination tablets and Sun Pharma and AstraZeneca had launched dapagliflozin-metformin combination tablets without seeking prior approval.

Following Glenmark’s representation, the NPPA analysed data from pharmaceutical audit agency Pharmatrac and it was observed that Abbott Healthcare had also launched dapagliflozin-metformin combination tablets without obtaining approval. Accordingly, the NPPA NPPA issued showcause notices to Glenmark, Lupin, Sun and Abbott.

In response to the showcause notices, the companies stated that the formulations are “patented products,” which are within the purview of para 32 of DPCO 2013 and are therefore exempted.

The authority noted that para 32 stipulates that companies seeking exemption under it have to submit the requisite documents. “This has been the procedure that has been adopted by the authority in all the four exemptions given so far under para 32 of DPCO 2013,” it added. The NPPA found “no room to to assume ignorance of the procedure being adopted for all such cases.”

“An exemption under para 32 of DPCO 2013 is not a one-time measure but also subsequent exemption from provisions relating to annual price increase,” the minutes further said. “Therefore, self-invocation of para 32 of DPCO 2013 needs careful examination to safeguard public interest to obviate any possibility of misuse.”