Biocon Ltd, the Rs 1,600-crore biotech firm, has locked horns with the drug price regulator, the National Pharmaceutical Pricing Authority, challenging the NPPA decision to fix and monitor the price of its recent diabetes product?Basalog.
The Bangalore-based company has moved the Karnataka High Court against the drug price regulator?s decision to slash the price of its glargine-based (synthetic) insulin analogue for type 1 & 2 diabetes mellitus.
Whether the NPPA was within its limits in fixing the price of the drug would now be decided by the court. Irrespective of the outcome, there would be repercussions on the Rs 600-crore insulin market, and would particularly have a bearing on the Rs 125-crore insulin analogue market, of which glargine-based products account for about Rs 50 crore.
The court?s decision may also have an effect on the pricing of the variants of the concerned diabetes product marketed by Wockhardt (Glaritus), Sanofi Aventis (Lantus), Eli Lilly and Novo Nordisk.
The current stand-off between Biocon and NPPA dates back to May when the firm launched a generic version of Lantus, marketed and patented in many geographies by French drug major Sanofi Aventis.
Biocon, India?s first biotechnology firm, has contested the NPPA decision, arguing Basalog doesn?t come under the drug price control order. Kiran Mazumdar-Shaw, chairman & managing director of Biocon, recently said that NPPA needs to review the stance since biotech products are exempted from the scope of DPCO and Basalog has been wrongly classified. She also pointed to a DPCO provision that exempts biotech drugs for five years, especially when developed in India.
But NPPA believes insulin in any form is an essential drug and falls within the ambit of DPCO?the order that determines the nuances of drug price regulation in the country.
NPPA officials told FE that multinationals like Eli Lilly, Novo Nordisk and Sanofi Aventis, which market forms of insulin, including glargine-based products, have been seeking price approvals from the drug price regulator for over five years now. The officials also said no provisions in the DPCO grants exemption to biotech products from price control.
When contacted, Biocon officials said, ?Since the matter is sub-judice, we would not be able to comment on it.?
The NPPA intervened in early August by fixing the prices of Basalog-3 ml vial cartridge at around Rs 130, from Biocon?s original rate of around Rs 500. It also slashed the prices of insulin glargine products of Wockhardt to the same level from around Rs 435. In the same order, NPPA asked Sanofi Aventis, Novo Nordisk and Eli Lily to cut the prices
of a range of their insulin-based products.
However, in the case of Biocon and Wockhardt, the drug regulator had given the orders after reportedly discovering that the two companies had flouted the norms by marketing the drug without its prior approval. Before passing the order, NPPA had sought cost data from the companies, to which it didn?t get a satisfactory response.
Basalog is a very important product in the company?s diabetes product portfolio. During the launch, Biocon had estimated that Basalog has the potential to earn revenues over $500 million in less than 10 years and had announced plans to market it globally in coming months. Biocon?s diabetes vertical is the lead revenue grosser of its four business divisions that include cardiovascular, oncology and nephrology.
The domestic diabetes product market is growing at 30% annually, while the diabetes analogue market is registering a growth of over 20%. The Indian task force on diabetes estimates that the country is home to 40 million diabetics. Globally, diabetics number around 200 to 230 million, and the figure is expected to double by 2020.
