New Delhi: The National Pharmaceutical Pricing Authority (NPPA) has revised the retail prices of antibiotic drug ceftazidime pentahydrate manufactured by drug majors Cipla and Wockhardt significantly downwards after it has come to know that it contains a compound that has become off-patent in 2023 and the methodology of 50 per cent reduction in case of off-patented drugs was not applied while fixing the prices of the generic products.
The two fixed doses combinations (FDCs) for which the prices have been slashed now are the generic version of Pfizer’s Zavicefta, one of the two drugs of the company that went off patent in the financial year 2022-23. The drug is used for treatment of infections including complicated intra-abdominal infection, complicated urinary tract infection and hospital acquired pneumonia in adults, infants aged three months and older, children and adolescents.
The matter came to the light after Samarth Life Sciences as marketer and Protech Telelinks as manufacturer, submitted their application to fix the retail price of Ceftazidime pentahydrate IP equivalent to ceftazidime 2.0 gm + avibactam sodium equivalent to avibactam 0.5 mg, based on the data available from Pharmatrac, the market research agency on which the drug price regulator relies for data related to price fixing.
The authority directed reexamination of the application, since the price was being fixed based on one brand only and it felt that there might be a possibility of either the product being patented or there might be other players in the market, but not captured in the Pharmatrac database.
In a latest meeting, the Authority identified that the particular FDC was patented by Pfizer Ireland Pharmaceuticals in India and expired in January, 2023. It also noted that on December 19, 2022, it notified the retail price of the said formulation at Rs 2,500 per vial as against the worked out price of Rs. 3,773.31 for Cipla, and on March 27, 2023 at a retail price of Rs. 3,773.31 per vial as against the claimed price of Rs. 5,267.85 for the formulation from Wockhardt Ltd as marketer and BDR Pharmaceuticals as manufacturer.
The Authority in its latest meeting observed that “these prices were calculated as per the Drugs (Prices Control) Order (DPCO), 2013, based on Pharmatrac data, without applying the 50 per cent reduction as applicable in case of off-patented drug, since fact about the said formulation about to become off-patent/has become off-patent was not known at the time of retail price fixation for the said two applications.”
It also noted that had the fact regarding subject formulation about to become off-patent or has become off-patent was known earlier, the prices would have been calculated by applying 50 per cent reduction so as to pass on the benefit of the drug becoming off-patent to the consumers, in line with practice being followed by the NPPA at that time.
Based on this, the Authority calculated the price of the two drugs at Rs. 1,886.66 per vial, which is 50 per cent of the retail price of Rs. 3,773.31 per vial. The downward revision of the retail prices has also been notified by the Authority in the Gazette of India as a corrigendum to its previous price notifications of these FDCs.
The NPPA has come out with the methodology to implement a 50 per cent reduction in the price of the compound which went off-patent or is on the verge of going off patent in the near future, while fixing the retail price of the generic formulations, with more number of drugs including some of the new generation of anti-diabetic molecules such as dapagliflozin and sitagliptin were going off patent in the recent past and several companies came up with request to fix the prices.
The methodology was developed considering that if the retail price is calculated based on six month prior market data, the price of the patented period would be taken into consideration and the benefit of price reduction due to medicines which become off-patent would not pass on to the consumers.
Considering the issue related to fixing of the retail price of an FDC with sitagliptin as a component, the MDC on March 14, 2022, recommended, “The Committee deliberated upon the matter in detail and is of the opinion that the price of drugs be reduced in respect of the drugs which has become/on the verge of becoming off-patent so as to pass the benefit of price reduction to the consumers and that a reduction of 50 per cent to be allowed on the patented component of FDCs (i.e sitagliptin) to arrive at the retail price”. This was accepted by the Authority in a meeting in the same month.
While industry majors appealed the pricing authority and the Department of Pharmaceuticals (DoP) against the decision, the Department in May, this year, notified an amendment to the DPCO 2013 to include provisions by which the retail price of new drugs with ingredients that have become off-patent or about to become off-patent will be arrived at by reducing fifty percent of the price calculated as per the provisions of the price control order.
