Drug price watchdog National Pharmaceutical Pricing Authority (NPPA) is reviewing the price control imposed two years ago on a key brand of Mumbai-based Alkem Laboratories following the company?s plea that its nausea drug was wrongly kept under price control.
The regulator had said in the official gazette that it fixed the price of Ondem Injection 2 ml vial after it found that its price allegedly rose more than 10% in the 12 months beginning June 2006.
The drug developed and first sold as Zofran by Anglo-American drug maker GlaxoSmithKline is used to treat nausea following chemotherapy. NPPA has now given a fresh opportunity to the producer to justify why it needed to raise the price, which prompted the regulator to fix the price at Rs 16.02 for a 2 ml vial based on its own cost calculation. The producer strongly disagrees with the price fixation. NPPA?s regulations say, once it fixes the price of a drug which is normally outside price control, the company has to take its permission to raise it again.
Also, any request for review of the price fixed by the regulator, will be entertained only after the company lowers the price as ordered by NPPA. The regulator also has the power to take action against the company for overcharging if the price is not lowered. This public interest price fixation of brands that are normally outside direct price control, has been adopted by the UPA government to check the spiraling rise in drug prices. One lacunae in this policy is that it checks only the price rise in any given period of time, not the introduction of a drug at an unreasonably high price so that the 10% yearly percentage increase permitted is also high.
During the last decade, NPPA?s intervention has seen companies reducing prices of 62 brands which are outside price control. The regulator also fixed prices of 27 such brands.