Share prices of major pharmaceutical companies slid today after the National Pharmaceutical Pricing Authority (NPPA) issued show cause notices to 67 pharmaceutical companies for introducing 201 new brands without taking price approval. The notice accuses pharmaceutical companies of altering a drug formulation that comes under price control by tweaking the strength or dosage of the drug.
The stock price of Glenmark Pharmaceuticals Ltd was down 2.3% at Rs 682.00; Piramal Enterprises Ltd down 1.57% at Rs 2,786.45; Dr. Reddy’s Laboratories Ltd down 1.79% at Rs 2,688.05; GlaxoSmithKline Pharmaceuticals Ltd down 1.01% at Rs 2,398.00 and Sun Pharmaceutical Industries Ltd down 1.15% at Rs 643.45.
Most of the 201 new brands are fixed dose combinations (FDCs). When two or more active drug ingredients are contained in a single dosage form, such as a capsule or tablet, it is known as an FDC. Of late, NPPA has been keeping an eye on pharma companies, which have been allegedly flouting the price ceiling. In February, NPPA sent a notice to several companies on overcharging in the case of 634 drugs.
The 67 companies that have been issued notices include many major firms such as Abbott Healthcare, Alkem, Biocon, Cadila, Dr Reddy’s Laboratories, GSK, Glenmark, Intas, Lupin, Mankind, Novartis India, Ranbaxy Laboratories, Sanofi India, Strides Shasun, Wockhardt and Zydus Cadila, among others.
Sun Pharmaceuticals, which owns Ranbaxy Laboratories, told The Indian Express: “This showcause (notice) has been posted this evening. We will check every product listed in the notice to ascertain their status and respond to the regulator within the stipulated timeframe. Sun Pharma is committed to compliance on all regulatory matters.”
NPPA has issued the show cause notice to Glenmark Pharmaceuticals for three of its brands — Milixim AZ, Milixim Turbo and Vorth TM. Similarly, Ranbaxy has received the show cause notice for nine of its specific brands. Glenmark told Indian Express, “We have just learnt of the matter from the NPPA website. We will examine the matter and will respond.”
On Wednesday, the NPPA stated: “During the monitoring of compliance of various provisions of Drug Prices Control Order, 2013 (DPCO, 2013), it is seen that the provision related to the ‘new drugs’ have not been followed by some companies.”
According to the NPPA, the 67 companies launched their new drug brands by altering a scheduled formulation “with strength/dosage other than as specified in DPCO, 2013 and/or in combination with other non-scheduled medicines, without even applying for price approval from NPPA as required under Para 15 (2) of DPCO, 2013”.