NPPA's price order, issued on Thursday, has effectively segmented this multi-vitamin market (of that specified composition) into capsules and coated tablets, for the purpose of price fixation. However, what took industry by surprise was the foot note, which extends the applicability of the order to almost all major vitamin B complex manufacturers in the country.

The note broadly seeks to cover various permutations and combinations (in terms of strength) of multivitamins in that specified category by laying down the increase/decrease in ingredients and the corresponding price increase/decrease to be implemented by the manufacturer. Sources said that the note says: ``For allother vitamin formulations having the composition within the prescription range notified, the following adjustments may be made by the manufacturer for the maximum retail price (MRP) for a product under the said order.... When there is a change in the composition, the following factors may be added or deleted as the case may be to the notified price given.''

In the case of the capsule version, the NPPA has fixed a ceiling price of Rs 9.12 for a pack of 10, while for the coated tablets, the ceiling price imposed is Rs 6.88 for a strip of 10, sources added.

The standard capsule version (as per the NPPA order) comprises a combination of 10 mg of vitamin B1, 10mg of B2, 3mg of B6, 7.5 mg of B12, 75mg of niacinamide, 25 mg of calcium pantoth, 150 mg of vitamin C, 20 mg of vitamin E and 22.5 mg of Zinc sulphate monohydrate.

Then the order stipulates that for every 5 mg increase/decrease or part thereof in the case of niacinamide in the formulation, the manufacturer is expected to add or subtract Rs 0.036 fromthe ceiling price indicated.

Similar figures are given for each ingredient of the standard version. A similar standard version has been referred to in the case of coated tablets. Broadly, the version covers a combination of vitamin B1, B2, C, nicotinamide, B6, calcium pantoth, B12, though this could not be officially confirmed. The impact, if any, of the latest NPPA order on the bottomlines of leading companies like SmithKline Beecham Pharmaceuticals, Pfizer, Nicholas Piramal, etc, could, however, not be ascertained.

The NPPA had, on April 15, announced a 31.48 per cent reduction in the prices of market leader Becosules, lowering the price of the formulations to Rs 7.90 from Rs 11.53 for a strip of 10 capsules.

INSIGHT
Margins to be under pressure

The current move by the NPPA is likely to affect almost all players in the multivitamin industry and margins are likely to be squeezed further. At a time when the government has been talking about reducing the rigours of price control, suchmeasures will send only wrong signals to the industry. The multivitamin segment is a highly competitive area, where market forces could have, in any case, brought down the prices to realistic levels. Rather than allowing the industry to operate in an free environment, the NPPA is creating unnecessary hurdles.

Shishir Asthana