Daily insulin shots for diabetics may now pinch harder.
In a move that may take insulin prices out of government control and raise the cost of the product that controls blood sugar, the department of pharmaceuticals (DoP) has asked the the National Pharmaceutical Pricing Authority (NPPA), which regulates the prices of essential drugs, to revisit its decision to peg the maximum price for insulin at the lowest retail rate among a set of producers.
Insulin is among 74 drugs whose prices the government controls. The regulator will now study manufacturing costs.
The DoP's notice follows a complaint filed by pharma major Eli Lilly against a price fixation order issued by the NPAA last November. While examining the application, the department observed that the NPPA has amended the sentence "shall not exceed 50% (of post manufacturing expenses)" to "shall not exceed 35%", which is beyond the power of the drug pricing regulator.
"As suggested by the DoP, the NPPA may follow the procedure under DPCO (Drug Price Control Order) 1995 and may revisit the decision by considering all relevant information," the ministry of chemicals and fertilisers wrote in a notice to the NPPA.
"We have invited companies to come and explain their cost structures and components which derive their maximum retail price," said CP Singh, chairman, NPPA. "Many came and gave thorough presentations without unveiling the components deriving such high retail prices."
Another global pharmaceutical giant, Novo Nordisk, had also challenged the NPPA's order in the Delhi High Court. The court asked the company to appeal for review before the DoP. Since then the department has been hearing appeals from insulin makers.
The NPPA has been particularly strict with insulin prices in India, mainly because of the huge gap existing between prices of indigenously manufactured insulin and imported variants. In November, it fixed two ceiling prices - for imported and domestic insulin - to make the product more affordable. Insulin prices were then slashed by up to 40%, which shrunk the size of the insulin market to Rs. 900 crore from Rs. 1,500 crore.