Industry recommends changes in draft guidelines for discontinuation of scheduled formulations

In the last six months, the National Pharmaceutical Pricing Authority (NPPA) has received several applications from the pharma companies to discontinue their brands from the market. For instance, in the last four months, the NPPA has dealt with the eight companies and the 13 formulations of essential medicines that they want to discontinue. They are Abbott Healthcare (4 formulations; (i) Ambistryn 1.0 gm injection, ii) Ambistryn 0.75 gm injection, iii) Hansepran 50 mg (iv) Hansepran 100 mg capsule 100mg); GSK ( 1 formulation i.e, Rabipur injection); Serum Institute of India (1 formulation i.e, Diptheria and Tetanus Vaccine T.D. 0.5 ml ); Allergan (1 formulation i.e, Celluvisc 0.4 ml), Menarini India (3 formulations; i) Cetrilak Solution 100ml, (ii) Phenzee Syrup 60 ml (iii) Scabper lotion, 3M India (1 formulation i.e, Glutaral disinfectant solution), Neon Laboratories (1 formulation i.e., Tropine 1ml injection), and Proctor & Gamble (1 formulation i.e., Livogen injection).

Therefore, earlier, this month, the NPPA issued a draft guideline for discontinuation of manufacturing essential medicines to ensure the availability of these medicines in the country.

Now, the industry is requesting the authority to amend Para 3 and Para 19 of the DPCO 2013 to improve the process and ensure availability of essential drugs.

Commenting on the issued draft guidelines of scheduled formulations under para 21 (2) of DPCO 2013, Vivek Padgaonkar, Independent Healthcare Consultant and Ex-Director OPPI & Ex GSK said, “The NPPA has been always transparent in its approach in order to make the essential medicines available to needy patients. The draft guidelines for discontinuation of scheduled formulations under Para 21(2) is a very good approach by NPPA. I guess many companies have approached NPPA for the same reason.”

Divulging more information, Padgaonkar replied, “In the matter of eight companies and the 13 formulations they seek to discontinue, certain decisions have been taken such as invoking para 3 in some cases and allowing them to discontinue post six months/12 months and invoking para 19, which allowed them to increase the price of the finished formulation. However, some of the cases have been referred to the Standing National Committee on Medicines (SNCM) for examination and recommendation.”

Padgaonkar further recommended the following measures:

1. The period mentioned for continuing production/import and sale of formulation, after notice of discontinuation by the company, as specified in the draft guidelines will create an additional financial burden for those companies who have applied for discontinuing the formulations. This is more significant in the backdrop of a severe impact due to the COVID-19.

2. The NPPA should invoke under Para 19 for the upward price revision of the loss-making formulations on case to case basis.

3. The NPPA should treat para 21(2) independently, it should not be combined with any other paras like para 3 or Para 19 as each para to the DPCO 2013 has a specific purpose.

Shirish Ghoge, Ex-Senior Director of Public policy and Government Affairs, Sanofi India said, ” With rumours about increasing duty on imports from China amongst already 20 per cent or so price increases in APIs we may have a situation of companies discontinuing their existing products for negative gross margins till locally made APIs are made available which may be in distant future. This notification will give some assurance that such products made from imported Chinese APIs (there are 54 such drugs) will be accessible to the patients. In fact last year the NPPA did raise the price by 50 per cent of 21 drugs and they are freely available now. This kind of practical approach will be appreciated by the industry.

He explained, “The draft guidelines on discontinuation of scheduled formulations have a silver lining in its para 3.5 that an upward price revision under para 19 will be considered to dissuade from discontinuation of a product for non-remunerative pricing. At the same time, there is a stick in para 3.6, if a company introduces a new product to evade price control then NPPA will compel the company to continue production under para (3) of DPCO.”

He further pointed out, “The issued draft notification still made a complex by dividing market share of discontinued products into four categories whereas just two categories one with less than 40 per cent markets share with five formulators having five per cent or more share each and the other being more than 40 per cent market share would have sufficed. The other unclear point is whether DoP has the power to compel manufacturers to continue production under para 3 or the unclear definition of a new product with reference to the discontinued product in para 3.6 of the guidelines.”

Ghoge stated, “It is also pertinent to note that there are certain provisions in the  DPCO 2013 like submission of Form III  mentioned in these guidelines or display of price list under para 25 by retailers and dealers which need to be dropped as they have no practical application and have remained on paper! Nevertheless, the DoP and the NPPA must be complimented for their balancing access to cheap drugs in the interest of patients and keeping the industry’s interest in making drugs available not by incurring losses.”

Dr Amit Rangnekar, Chairman, Pricing Committee, IDMA informed, “The IDMA has submitted suggestions on the draft discontinuation guidelines for scheduled formulations dated 01.06.2020, issued by the NPPA and believes that only para 21 (2) of DPCO 2013, should be applicable to the discontinuation guidelines and Para (3), Para (19), as well as Form-I which are all unrelated, should not be linked.”

Highlighting the steps which need to be taken into consideration by the authority, he added, “The system of issuance of public notice should be stopped, instead, the list of Form-IV scheduled formulations should be displayed on the NPPA website for public information.”

Rangnekar said, “To ensure gradual discontinuation of scheduled formulations, without any shortages, and without issuing any public notice, we (IDMA) have suggested a mechanism of slabs based on the Form-IV application, which will serve the purpose. And the inclusion of these suggestions in the final guidelines would ensure better compliance and ‘ease of doing business’ which is in consonance with the government policy.”

The NPPA is evaluating the received recommendations received from the industry associations on the draft guidelines for discontinuation of scheduled formulations.