Novartis India is up in arms against a two-month old decision of the National Pharmaceutical Pricing Authority to reduce the price of its flagship brand Voveran on public interest grounds.
The annual sales of Voveran, the brand name for pain reliever medicine diclofenac, exceed Rs 100 crore and account for one-fourth of the company's total sales turnover. The company has filed a review petition with the chemicals and fertilisers ministry against the authority's decision.
According to the complaint filed by Novartis, the NPPA decision is not justifiable and is out of tune with existing guidelines and rules governing the prices of medicines that are not controlled.
NPPA does not normally fix the prices of of medicines that are 'out of price control'. Instead, it monitors the prices of such medicines to check for any sharp increase.
NPPA had found that Novartis had hiked the price of Voveran by over 20 per cent in a year (May 2006 - May 2007).
Since the rules prevalent at that time did not permit an annual price increase in excess of 20 per cent, NPPA swung into action to fix the prices. The permissible annual limit was later brought down from 20 per cent to 10 per cent.
Novartis has questioned this decision by saying that the price increase was in the range of 14.35 per cent and hence within the permissible limit. It also pointed out that the price revision was partially due to the introduction of "MRP inclusive of taxes" instead of the earlier "MRP exclusive of taxes".
The company, in its review petition says that the actual price increase, after considering the tax component and local levies such as octroi, was below 10 per cent.
Incidentally, Novartis is not the only company to oppose NPPA's actions to invoke the public interest clause (para 10 b) of the Drugs Price Control Order (DPCO) to fix the prices of medicines. Ranbaxy had filed review petitions on several occasions. It had even sought judicial intervention in the case of Roscillin capsules recently.
