The National Pharmaceutical Pricing Authority (NPPA) will change the ceiling prices of medicines ? notified on Monday ? which brought down average prices of painkillers, antibiotics and cardiac drugs by around 30%, after the authority concludes its data collection exercise.

?After completion of the initial pricing exercise, the ceiling prices may be duly verified with data collected by NPPA and wherever it is required ? The price revisions may be carried out…,? said the minutes of the NPPA meeting held on June 12.

NPPA is in the process of collecting details of price to retailer and moving annual turnover (MAT) of essential medicines directly from the manufacturers. ?It is a huge task to build a reliable data with details of all big and small manufacturers in the country and may take some time,? CP Singh, the NPPA chairman told FE.

He said that depending on data provided by private market research agencies like IMS Health and AIOCD AWACS, which are ?incomplete, inadequate and many times defective?, may lead to a distorted medicine pricing regime.

?In many cases we found the MAT data for various combinations of molecules have been clubbed for a company. Moreover, the data is not comprehensive or detailed for all drug makers in the country and for all molecules listed under the national

list of essential medicines,? said Singh. He, however, did not give a timeframe for completion of NPPA data gathering exercise.

NPPA noted the data provided by research agency IMS Health, used by the authority to compute ceiling prices, do not cover all brands and generic medicines available in the market, therefore, ?It may not be possible to conclusively assume that the market share derived from IMS Health data is accurate and final.?

As per recent NPPA notification, prices of cardiovascular drugs and anti-hypertensives (losartan potassium, atorvastatin) will drop by 30%, while popular pain killer paracetamol and antibiotic azithromycin will reduce by nearly 40%. In some specific cases like anti-cancer drug Carboplatin injection prices have fallen by 57% from R102 to R50 per vial and anti-allergic medicine chlorpheniramine maleate will see a price reduction of around 78%.

?By the end of this month, we should have covered more than 400 packs which come under the essential medicine list,?said Singh. NPPA will hold meetings on June 21 and June 28 to finalise new ceiling pricing of most of the drugs under control. ?Price reduction in most categories is around 20-30%,? he added. New prices of essential drugs would be available in the market by middle of August.

The ceiling price, as per the pharmaceutical pricing policy, is a simple average price of all brands having market share more than and equal to 1% of the total market turnover of that medicine. NPPA says it has calculated the ceiling prices after ?clubbing MAT value of specific medicines manufactured by the same company in different brand names/generic names for determining the market share for working out the ceiling prices?.

Industry has opposed NPPA?s method stating it to be in variance with the formula accepted by the Cabinet. Singh said interpretation of the definition of ?brand? as specified under the DPCO 2013 allows NPPA to consider all brands of a particular drug sold by a company to compute an average price.

This average price is considered when deciding whether it commands more than 1% market share in a particular therapeutic category.

However, industry contends that as per its understanding only brands with a share of more than 1% should be considered while fixing ceiling prices. ?There had been tremendous debate on the formula of ceiling prices. Many options were discussed including average of top three firms, however this market-based formula was allowed by the Cabinet and this should be followed,? said an industry player.