Govt Obliged To Fix Retail Price Against Cos’ Application As DPCO Does Not Demarcate Patented Products: NPPA


New Delhi : In a significant development related to the generic pharma pursuing the drugs which are on the verge of becoming off-patent, the National Pharmaceutical Pricing Authority (NPPA) has said that it is obliged to give retail price to the existing manufacturers on receipt of application for price approval and patent disputes on the drug cannot affect this process as per the law.

The decision was on several representations sent by pharma major Boehringer Ingelheim and the Organisation of Pharmaceutical Producers of India (OPPI) against the retail price fixation of new drugs, that is the fixed dose combinations (FDCs) comprising linagliptin and metformin tablets; and sitagliptin and metformin tablets, the diabetes drugs which according to the NPPA documents, are on the verge of becoming off-patent.

Linagliptin is a patented compound from Boehringer Ingelheim, while sitagliptin is a patented compound from Merck Sharp and Dohme. According to reports, linagliptin is expected to go off-patent in the year 2025, while the patent rights for sitagliptin is expected to expire in a few months.

Boehringer Ingelheim informed the NPPA that it has received an injunction order from the High Court of Himachal Pradesh restraining Macleods Pharmaceuticals Ltd from manufacturing and selling the product under the brand name of Linmac and Linaone.

NPPA’s legal division, however, opined that the case between Boehringer Ingelheim and Macleods Pharmaceuticals is a civil suit between two private parties contesting their rights with regards to the patent of the drug. NPPA regulates and monitors the prices of drugs in the country and has a duty to ensure the affordable medicines to the public at large within the compliance of extant Drugs (Prices Control) Order [DPCO].

When the existing manufacturer of a drug with dosages and strengths as specified in National List of Essential Medicines (NLEM) launches a new drug, they shall apply for the price approval in specific form under the DPCO. Para 15 of the DPCO, 2013 provides the fixation of retail price of a new drug for existing manufacturers of scheduled formulation and Para 15(3), mandates the government to forward the application to the Standing Committee of experts who shall recommend the retail price within thirty days from the receipt of application.

The Authority also observed an Office Memorandum from the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry on August 8, 2019, stating that the Indian Patents Act, 1970 does not contain any provision to link the patent rights to marketing approval for a product and the Drugs and Cosmetics Act does not require the Drug Controller General of India (DCGI) to see whether a patent existing on a drug on which application of marketing approval has been received. The DCGI is also not empowered to take that view, it said.

The Office Memorandum further states that the NPPA takes decisions for fixation of retail prices as per the provisions of DPCO 2013 and relevant laws, and may not be technically qualified to decide on the existence and scope of a patent in any proposed formulation.

In a meeting held on May 6, the Authority opined that it is under obligation to give retail price if any existing manufacturer launches a new drug and makes and application in this regard to obtain the price approval from the NPPA by producing the relevant documents such as the valid license obtained from the Central Drugs Standard Control Organisation (CDSCO).

“DPCO, 2013 does not provide any express demarcation between patented drug and non patented drug. Since, Para 15 (3) of DPCO, 2013 is mandatory provision and not the directory provision, therefore the Government is under obligation to give retail price to the existing manufacturer on the receipt of the application for the price approval of new drug for the compliance of DPCO 2013,” said the Authority.

“Further more, patents are private rights which are to be enforced by the patent owner. If any other entity infringes on the rights, the patent owner can initiate legal proceedings against them,” observed NPPA. The Authority meeting further decided to fix and notify the retail price of the two anti-diabetic FDCs. It has followed a formula under which the prices of the patented component of these two FDCs were cut by 50 per cent while deciding the retail price of the generic equivalent. It has considered the application from several Indian generic manufacturers for the production of these anti-diabetes FDCs and fixed their retail prices accordingly.

The observation comes at a time when reports are that India is expected to see drugs worth around $240 billion go off-patent till 2026. NPPA is also examining whether the price reduction on such drugs at a benchmark 50 per cent cut of the patented compound on a case-to-case basis.


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