NPPA introduces uniform procedure for dealing with cases of launch of new drugs without prior price approvals
The National Pharmaceutical Pricing Authority (“NPPA”) has, vide an office memorandum dated 24th November 2017, declared that a standard and uniform procedure is to be followed in order to bring clarity in the examination of cases of launch of new drugs (“formulation”) ‘without prior price approvals’ (“WPA Cases”) and standardization of documents to be submitted by the pharma companies.
Key highlights of the uniform procedure:
- The WPA Cases will be dropped if:
- The company proves that the formulation was launched before 15th May, 2013 i.e. before the Drugs (Price Control) Order, 2013 (“DPCO”) came into effect by producing evidence [for example: license issued by State Drugs Controller/Drugs Controller General (India)] or invoices and samples, certified by the Chartered Accountant/ Cost Accountant; or the same is confirmed by the All India Organization of Chemists and Druggists (“AIOCD”) – Pharmatrac data.
- The company proves that the formulation does not fall under the definition of ‘new drug’ under the DPCO, or that the formulation is a ‘scheduled formulation’ and the ceiling price complies with the provisions of the DPCO.
- It is proven that the formulation is not a new formulation and only the pack size has been changed; or it has just been launched under a new brand by the same company or any other company at a price equal to or less than the earlier price. In case of increase in price, it must be in conformity with the provisions of paragraph 20 of the DPCO.
- If any WPA case cannot be dropped, it will be referred for price fixation and after fixing the price the concerned companies shall be liable to deposit the overcharged amount along with interest, calculated from the date of overcharge, in addition to penalty as per the provisions of the DPCO.
- The NPPA has instructed the companies to submit complete and requisite documents under the prescribed uniform procedure and also, in case of launching any formulation, to obtain requisite price approval after complying with the Integrated Pharmaceutical Database Management System (IPDMS) requirements by submitting Form I in Schedule-II of DPCO along with other documents as required by NPPA.
The NPPA vide the office memoranda dated 17th May 2017 and 26th May 2017 had communicated the identification of formulations launched by pharma companies on the basis of Pharmatrac (market data) without following the provisions of the DPCO, 2013. During examination of the replies sent by the companies, it was observed that the companies had not submitted the requisite documents to support their contention. Hence, to bring clarity and uniformity in the entire process this office memorandum was issued.
Please refer to the hyperlinked source below for further details and to the attached documents for the NPPA office memorandums dated 17th May 2017 and 26th May 2017.