Drug price cut to help rival, alleges Piramal Healthcare.

NEW DELHI: Piramal Healthcare has said the country’s drug price regulator’s decision to lower prices of its anti-bacterial medicine was aimed to benefit its rival Dr Reddy’s Laboratories, and has written to the government to revoke the price cut.

On July 21, National Pharmaceutical Pricing Authority (NPPA) had reduced prices of Piramal Healthcare’s drug Gatifloxacin 400 mg, sold under the brand Gatri, by 12% to a maximum retail price (MRP) of Rs 73.70 for a pack of 10 tablets, including excise duty and local taxes.

Market leader and rival brand Gaity, sold by Dr Reddy’s, cost more than 50% of Gatri’s permissible MRP, alleged Piramal Healthcare in a letter to the secretary, department of Pharmaceuticals.

“The basic spirit of the Drug Price Control Order (DPCO) has been put aside, as a consequence of which our competitors stand to benefit hugely,” it said asking the NPPA to withdraw its order. Since Piramal’s brand has been put under price control, it cannot increase its price while its competitor, with its costlier brand, is free to do so, it said in the letter.

In its notification, the drug price regulator had said that Piramal increased the price of its brand more than 10% during August 2007 to August 2008, hence it brought the medicine under price control using a policy provision in public interest. Although Gatifloxacin is not under the government’s list of drugs under price control, companies cannot increase prices of such drugs by more than 10% in twelve consecutive months.

Piramal Healthcare said it last revised the price of its brand during the year-ended March 2008. The Mumbai-based company said it had it used the permissible provision to raise its price by 10% every 12 months its drug would cost Rs 89 compared with Rs 84, the original price before NPPA reduced it to Rs 73.70.

Piramal Healthcare is unlikely to challenge the drug price regulator’s move in the courts as it has announced sale of its domestic formulation business, that includes the brand Gatri, to US-based Abbott Laboratories.

Source : economictimes.indiatimes.com