Last Updated on March 1, 2024 by The Health Master
Ceiling Price
In the intricate web of pharmaceutical pricing regulations, the Department of Pharmaceuticals (DoP) recently found itself revisiting the calculation of the ceiling price for a specific strength of the antibiotic cefuroxime.
This development stemmed from an error in the pricing notification issued in December 2022, prompting the DoP to refer the matter back to the National Pharmaceutical Pricing Authority (NPPA) for recalculation.
Glenmark Pharmaceuticals’ Challenge
The catalyst for this revisit was a review application filed by Mumbai-based Glenmark Pharmaceuticals in January 2013.
Glenmark contested the NPPA’s price fixation order on December 19, 2022, which set the ceiling price for cefuroxime oral liquid 125 mg/5ml.
The crux of Glenmark’s argument lay in the alleged miscalculation of the drug’s ceiling price, urging the NPPA to reconsider by factoring in the actual Price To Retailer (PTR).
NPPA’s Price Fixation and the PTR Conundrum
Glenmark argued that the NPPA had based its calculation on inaccurate PTR data from certain brands, including:
- Cefakind 125 mg syrup 30 ml (Mankind Pharmaceuticals),
- Cetil 125 mg dry syrup 60 ml (Lupin Ltd), and
- Xoxe 125 mg dry syrup 30 ml (Corona Remedies).
In its representation to the NPPA on December 7, 2022, Glenmark pointed out these discrepancies within the prescribed timeline of 10 working days.
The company emphasized that the correct PTR data should have been considered for Cefakind at Rs. 117.86, Cetil at Rs. 240.89, and Xoxe at Rs. 120.21, as opposed to the erroneously considered Rs. 107.14, Rs. 219.11, and Rs. 109.29, respectively.
NPPA’s Oversight and Subsequent Response
Responding to Glenmark’s review application, the NPPA acknowledged an oversight in the consideration of Form V filed by Mankind Pharmaceuticals.
The NPPA stated that Lupin Ltd and Corona Remedies did not file Form V, leading to the exclusion of their price revisions.
While Mankind Pharmaceuticals submitted its Form V on July 22, 2022, it was inadvertently not considered.
Review Authority’s Observations and Decision
Upon reviewing both sides of the argument, the review authority noted the acknowledgment by NPPA of the oversight regarding Mankind Pharmaceuticals’ Form V.
Prima facie, it was evident that considering the form would have resulted in a slightly higher ceiling price of cefuroxime oral liquid 125 mg/5ml at Rs. 4.74 per ml instead of the originally determined Rs. 4.71.
The review authority recommended that NPPA thoroughly scrutinize the calculation for any possible errors, paving the way for a fair and accurate determination of the ceiling price.
Recalculation and the DPCO, 2013
In light of these findings, the case was referred back to NPPA for recalculation of the ceiling price, adhering to the provisions of the Drug Price Control Order (DPCO), 2013.
This regulatory framework aims to ensure affordability and accessibility of essential medicines while regulating their prices.
Ensuring Accuracy and Fairness
The incident underscores the importance of precision in calculating ceiling prices, as even minor oversights can impact pharmaceutical companies significantly.
The transparency and fairness in the pricing mechanism are crucial to maintaining trust and fostering a healthy pharmaceutical industry.
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