Report from India - Pharmaceutical Technology

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Report from India
India's drug pricing authority increased the retail costs of certain domestically manufactured drugs, but not those of imported drug products. Pharma is asking why.

Pharmaceutical Technology
Volume 35, Issue 6, pp. 18-20

The global response

Imported insulin brands of multinational firms, such as Indianapolis-headquartered Eli Lilly, Denmark's Novo Nordisk, and France's Sanofi, make up two-thirds of the insulin market share in India. Objecting to NPPA's price hike, Eli Lilly is taking the issue to local courts and Novo Nordisk is seeking a governmental review of NPPA's decision.

Other global drug manufacturers are likely to follow suit, but Pfizer's Mumbai headquarters is trying a different approach. Pfizer has been seeking a price increase in India for its imported drug Medrol (the generic version is methylprednisolone) used to treat allergic disorders and arthritis. NPPA denied the company's request, and, says Kewal Handa, managing director of Pfizer Limited, an open dialogue with the concerned officials is the best medium to adopt in this instance. "If the NPPA reduces prices, we cut costs. If it increases drug prices, multinationals should also benefit.'' Although he did not specifically comment on Medrol, Handa says that multinationals should engage in dialogue with Indian authorities, "either personally with the government, or use the good offices of the association that caters to multinational drug majors to address their grievances.''

The ongoing battle

Incidentally, it is not just insulin that is under scrutiny. Branded breast-cancer medications that contain the ingredient letrozole are also being reviewed, as are a host of other imported medications. Meanwhile, NPPA is still waiting for global drug manufacturers to share certain details about their imported brands meant for the local market. One NPPA official says, "They have not acceded to our requests."

Table I: Price differences among anticancer drugs in India.
The official added that several importers have been asked to verify with details whether the price of the drug in India was reasonable, given that generic versions of the same drug sold by domestic firms were retailing at one-tenth of the price. In fact, NPPA has found many significant price variations among different brands of the same medicine sold in the country (see Table I).

G.G. Nair, past president of the Indian Drug Manufacturers Association, says all imported medicines follow a price-control formula. "There are two categories of imported medicine: patented in India and not patented in India. Another category is that of equivalent drugs available in the local market and not available [in the local market]. If it is not available, multinationals can fix any price and import into India and the NPPA can't intervene,'' he says. However, because the Indian rupee appreciation factor is calculated to determine the domestic cost of a medicine, Nair says that NPPA has initiated measures to ensure that importers of medicines pass on the benefits of cheaper imports, on account of the stronger rupee, to consumers.

In the meantime, the battle over pricing continues. In April 2011, NPPA issued notices to multinational as well as domestic drug companies for overcharging consumers, claiming arrears of $521 million through Jan. 31, 2011. Of this amount, $46 million was recovered. Several cases are still in litigation.

—A. Nair is a freelance writer based in Mumbai


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