NPPA To Examine Whether Price Reduction Of 50% On Drugs Going Off-Patent Could Be On Case-To-Case Basis

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New Delhi : At a time when drugs worth around $240 billion are expected to go off-patent in the next few years till 2026, the drug pricing authority of the country may examine whether the price reduction on such drugs at a benchmark of 50% of the patented compound could be on a case-to-case basis.

The matter comes after the National Pharmaceutical Pricing Authority (NPPA) last month fixed the prices of generic fixed dose combinations (FDCs) of sitagliptin and linagliptin, the diabetes drugs going off patent soon, with a 50 per cent reduction on the patented component.

The multidisciplinary committee of experts of the Authority has expressed that the benefit of price reduction due to expiry of the patents is to be passed on the consumers, for which the reduction of 50 per cent on the patented component of the scheduled formulation is allowed in respect of FDCs of sitagliptin+metformin tablet and linagliptin+metformin tablet. It was based on the recommendation of the Committee, the NPPA reduced the prices of these FDCs in March.

The decision was considering that if the price of these drugs are reduced based on the six month prior market data, the price of the patented period would be taken into consideration and the benefit of price reduction would not be passed on to the consumers.

The Committee has now opined that the benchmark of 50 per cent may be examined on case-to-case basis by the Committee for the medicines which has become/is on the verge of becoming off-patent.

The Committee headed by Manmohan Sachdeva, advisor (Cost), NPPA, during its latest meeting in April, decided to take the issue for detailed deliberation in the next meeting, in order to take a considered view on the matter.

The patent of sitagliptin, a drug patented by Merck Sharp and Dohme, is expected to expire in July, 2022. The Authority calculated the retail price of sitagliptin 50 mg tablet at Rs 34.27 as per data on May, 2021, and arrived at a price of the compound at Rs 17.135 by applying the 50 per cent benchmark price reduction on patented product. The ceiling price of Metformin IR 1000 mg was at Rs 3.61 and the recommended retail price of the sitagliptin 50mg+Megformin Hydrochloride IP 1000 mg after reduction according to the Pranab Sen Committee report, was Rs. 20.025 per tablet.

Similar 50 per cent price reduction was applied on the linagliptin compound in the FDC products to be manufactured and marketed by Indian generic players.

Besides the prices fixed for individual companies for the FDCs of sitagliptin and linagliptin in March, the Committee in its meeting this month also recommended price fixation of three FDCs of sitagliptin and metformin tablets in 17 applications and three FDCs of linagliptin and metformin tablets in five applications.

According to a report by Care Ratings in August, 2021, over the next few years till 2026, the patented products worth about $240 billion are expected to go off-patent.

“This provides a large opportunity to Indian generic formulation companies. Many of the Indian pharma companies are already working to develop the generic version of patented products to exploit the upcoming opportunity,” said the report.

It added, “It is expected that Indian pharma companies might get an opportunity worth around $5-6 billion due to patent expiry in the next 4-5 years”.

Some of the drugs that are expected to go off patent, according to reports, include eltrombopag, sitagliptin, linagliptin, empagliflozin, canagliflozin, among others.

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