Indian Govt & Pharmaceutical Firms to Explore a "Reasonable" Pricing System for Non-Patent Drugs

Together, the federal government and pharmaceutical corporations are developing a pricing system for drugs that are about to lose their patent protection. Given the recent patent expirations of important diabetes medications, including those containing the active pharmaceutical ingredient Metformin and Metformin Hydrochloride, the move is significant. Last week, representatives from the industry and the department of pharmaceuticals met with stakeholders.

The government and the domestic pharma industry are to meet to work out the wrinkles on a pricing structure for drugs that are going off patent, reports The Pharma Letter's India correspondent, as Indian drugmakers complain about not receiving an adequate "reward for incremental innovation." The decision is crucial in light of the recent patent expirations of important diabetes medications. Over 200 new brands have been introduced in the last two months by 50 local companies, competing for market share with already established businesses. Despite the fact that consumers have benefited from the decline in the cost of diabetes drugs, domestic pharmaceutical companies are embroiled in a price war. Dynamics of market share have also altered significantly, and if compared to India's entire medicine market, the diabetes segment has shown remarkable expansion.

Rejecting review petitions from six manufacturing firms, including Lupin and Zydus Healthcare, the Department of Pharmaceuticals (DoP) recently affirmed the National Pharmaceutical Pricing Authority's (NPPA) approach of determining retail prices for formulations of off-patent anti-diabetic drugs. Zydus Healthcare submitted review petitions in support of its Dapagliflozin + Metformin formulations as well as its Vildagliptin + Metformin formulations, while Lupin, Torrent Pharmaceuticals, Emcure Pharmaceuticals, Skymap Pharma, and Aprica Healthcare supported their Vildagliptin + Metformin formulations.

Why is it noteworthy?

Both consumers and producers are likely to gain from a predictable pricing structure. While many patients who can afford it might want to stick with the innovator brand, a patent expiration may result in new prescriptions, hence a price mechanism is required. Over 200 new brands have been introduced in the last two months by 50 local companies, vying for market share with already established businesses.

While the final decision has not yet been reached, ChemAnalyst reports that the pricing mechanism is probably going to impose a price cap for pharmaceuticals going off-patent at 50% of the innovator price. According to experts, this will provide a predictable price regime for both the company and the consumer.