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The Department of Pharmaceuticals (DoP) has rejected two review applications filed by Bengaluru-based pharma start up La Medica Life Sciences on retail price fixation by the drug price regulator for two anti-diabetic formulations observing that ignorance of law, rules and regulations cannot be the valid grounds for getting any relief in case of not abiding by the same.
An alleged mistake by the company related to excluding the goods and services tax (GST) while submitting the claim and overlooking the proposed retail price after the draft calculation sheet was published by the National Pharmaceutical Pricing Authority (NPPA) has costed the company’s pricing for the anti-diabetic formulations dearly, even though its claimed retail prices were lower than the worked out prices.
The start up firm submitted applications for fixing retail price of a fixed dose combination of metformin hydrochloride prolonged release 500 mg and glimepiride 2 mg and another combination of metformin hydrochloride prolonged release 500 mg and glimepiride 1 mg, on January 25, 2022. The company requested the NPPA to consider the price of Rs. 138.39 per pack of 15 tablets, which is Rs. 9.23 per tablet for the combination with glimepiride 2 mg and Rs. 94.64 per pack of 15 tablets, which is Rs. 6.31 per tablet for the glimepiride 1 mg combination.
The NPPA issued a notification on April 12, 2022 fixing the retail price of these FDCs manufactured by East African (India) Overseas and marketed by La Medica Life Sciences, at Rs. 8.24 per tablet and Rs. 5.63 per tablet, excluding GST, respectively.
As the pricing authority fixes the retail price without GST, the company had not specifically mentioned the prices to be exclusive of GST in their Form I application and construed that the Authority would also treat this retail price submission as exclusive of GST and would fix the retail price accordingly. NPPA, however, in its draft price proposal indicated that the company had applied for retail price as including GST and reduced the GST at 12 per cent from the retail price claimed by the company and approved the retail price of Rs. 8.24 and Rs. 5.63 per tablet respectively, excluding GST.
During the review hearing by the DoP, in July, 2022, the company submitted that being a new entrant and undertaking the exercise of submitting the Form for retail price fixation for the first time, they had mistakenly overlooked the draft retail prices on NPPA website. The company requested that the slip on its part may be condoned and they be allotted the prices previously claimed by them, which are already below the worked out retail price by NPPA.
NPPA argued before the review authority that the company did not specify whether the claimed price is inclusive of GST or not. The worked out retail price was Rs. 9.73 per tablet excluding GST for the combination with glimepiride 2 mg and Rs. 6.89 per tablet excluding GST for the combination with glimepiride 1 mg, and since the price claimed by the company, that is Rs. 8.24 and Rs. 5.63 per tablet excluding GST was lower than the worked out and uploaded price, the same were proposed as price for the formulation applied by the company.
It added that the draft version of the price calculation sheet was uploaded on NPPA website on February 14, 2022 for comments within 10 working days and no representations were received from the company within the prescribed period.
The price regulator added that the company’s contention that it should be provided an opportunity for revision of prices on the grounds that it was filing the Form-I application for the first time and the prices claimed by them are exclusive of GST is not tenable as it was granted a period of 10 working days to make any representation, but failed to do so.
The review authority, under the DoP, observed that during the review hearing the company accepted its ignorance and submitted that being a new company, they lack the experience and were filling the particular form for the first time.
“It is established that the NPPA has followed its standard practice continuously without any discretion and deviation. Further the ignorance of law, rules and regulations cannot be the valid grounds for getting any relief in case of not abiding by the same,” observed Rajneesh Tingal, joint secretary, DoP, while rejecting the review applications as devoid of merit.
La Medica Life Sciences Pvt Ltd sells its anti-diabetic formulation of metformin hydrochloride prolonged release and glimepiride tablets IP under the brand Insuss-1 and Insuss-2, according to the company website. The company deals with products in anti-diabetic, dermatology, hematanic, immuno booster, anti-inflammatory, gastro esophageal reflux disease and respiratory segments.
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