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Thursday, June 22, 2017

Cancer drug prices slashed up to 86 per cent in a year: NPPA

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NEW DELHI: Drug pricing regulator NPPA has slashed price of cancer drugs by up to 86 per cent since March last year providing relief to lakhs of patients.

There has been “a significant price reduction in cancer drug prices since March 2016”, the National Pharmaceutical Pricing Authority (NPPA) said in a tweet.

The drugs include Iressa of AstraZeneca Pharma IndiaBSE 0.42 % whose price has been bought down from Rs 29,259 to Rs 3,977, a reduction of 86 per cent and Dr Reddy’s laboratoriesBSE 0.13 %’ Grafeel – the of which price has been slashed by 41 per cent, it said.

The reduction is in the price range of 86 per cent to 13 per cent, NPPA said.

The other pharma players the prices whose cancer medicines have been reduced are Natco PharmaBSE -0.08 % and Emcure pharmaceuticals among others, it added.

In the diabetes segment also, there has been reduction in prices of the drugs, the regulator said.

“Significant price reduction in some major diabetic drugs since March, 2016,” NPPA said.

The prices have been reduced in the range of 42 per cent to 10 per cent, it added.

While prices of Glypride of Sun PharmaBSE -0.84 % Laboratories Ltd were reduced by 42 per cent, from Rs 91 earlier to Rs 53 after the revision, the drugs of other players have also witnessed reduction in the prices.

The other drugs whose prices were reduced include Dr Reddy’s laboratories Glimy, Obimet of Abott India, Cetapin of Sanofi India and Lupin’s Gluconorm, it added.

Set up in 1997, NPPA has been entrusted with the task of fixation/revision of prices of pharma products, enforcement of provisions of DPCO and monitoring of prices of controlled and decontrolled drugs.

How the NPPA has transformed itself into a watchdog with teeth under Bhupindra Singh

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MUMBAI:Over the space of a month, the National Pharmaceutical Pricing Authority (NPPA) has transformed itself into a watchdog with teeth, and it’s putting the bite on Big Pharma.

First came the crackdown on stent pricing, targeting what it said was runaway pricing in the Rs 3,600-crore market. Prices were slashed by 80-85%, hitting multinationals such as AbbottBSE 1.01 % and Boston Scientific along with homegrown companies like Translumina Therapeutics.

Then came an even bigger crackdown — the regulator said 634 drugs were suspected to be priced higher than the ceiling fixed for them under the Drug Price Control Order (DPCO). That affected companies across the board — Sun PharmaBSE 1.44 %, CiplaBSE 0.08 %, LupinBSE 0.70 %, AstraZenecaBSE 0.48 %, GlaxoSmithkline and PfizerBSE -0.87 % among others.

The man leading the charge is NPPA Chairman Bhupindra Singh, 57, who took charge at the beginning of last year.

“My job is just to set up realistic targets, prepare a plan of action and Team NPPA does the rest,” Singh told ET. “They know that I am there to take responsibility and accountability for all missed goals.”

Opinions about Singh are sharply divided, as expected, between “overzealous and overstepping” and activists who say he makes for a refreshing change after being “used to supine bureaucracy”. Still, some government officials are uncomfortable, questioning the impact of such harsh audits on the investment climate.

Following a whistleblower’s email on February 27, Singh and his 10-member NPPA team are now looking into allegations of price collusion in various brands of anti-diabetic drug vildagliptin. The drug is made by companies such as NovartisBSE -0.21 %, Abbott, Emcure and USV Pharma. The companies involved in the NPPA actions have denied any wrongdoing.

The soft-spoken Singh, an Indian Administrative Services officer belonging to the Uttar Pradesh cadre, has been busy firing off notifications after he took over, even using social media to spread the word — he’s got 800 followers on Twitter. Also, significantly, hospitals are now coming under NPPA scrutiny.

“Hospitals need to redefine their role as a ‘healthcare provider’ or a ‘distributor/dealer of stents, other devices/drugs or both,” he said in a tweet late last month. This seemed to be aimed at hospitals complaining about the stent price cuts.

The NPPA sent show-cause notices after complaints about stent prices to hospitals such as Max in New Delhi, Lilavati in Mumbai and Metro in Hyderabad. “Total 24 complaints of overcharging on stents, nine hospitals issued show-cause notices, copy of bills awaited in other cases,” Singh tweeted on March 2. Last week, a hotline was set up for patients and whistleblowers wanting to phone in complaints about shortage of stents because of the recent order.

The NPPA’s crusade comes a few months after the Niti Aayog said the pricing regulator needed to be scrapped, a move that faced criticism. That proposal now seems to have gone on the backburner. More importantly, the once-disregarded regulator gained endorsements from Prime Minister Narendra Modi during the current election campaigns.

Singh said all the allegations against him can be refuted with facts, that the stent price cap was imposed after detailed deliberations with industry.

Indian drugmakers are concerned that the NPPA isn’t toeing the line of the department of pharmaceuticals (DoP), which the regulator comes under.

“The problems have cropped up because of imaginative and arbitrary implementation of the pricing policy and unbridled turf war between the government (DoP) and the regulator (NPPA),” wrote DG Shah of Indian Pharmaceutical Alliance lobby group to Niti Aayog Vice-Chairman Arvind Panagariya on February 28. “This has resulted in unwarranted price fixation, open defiance of the government’s corrective orders by the regulator, and frustrating litigations for the industry. It has reached a stage where the industry wonders if the country has arule of law.”

This sentiment was echoed by a lawyer who represents many large pharma clients, arguing that the regulator was imposing a one-size-fits-all approach.

“I don’t think the secretary, DoP, and NPPA chairman see eye to eye,” he said. “Stents were brought under the National List of Essential Medicines (NLEM). The NLEM committee recognised that there are different kinds of stents like drug eluting, BVS (bioabsorbable vascular stents) and wanted that they be categorised and priced differently. Under the Drug Price Control Order (DPCO), there is no room for nuance, so the regulator used para 19 and put everything under it. As a result, stents like BVS, landed price of which is about Rs 2 lakh, are not available. This is bizarre.”

Paragraph 19 of the DPCO allows tBhuindrahe NPPA to set the price of any drug “in extraordinary circumstances, if it considers necessary so to do in public interest”.

AdvaMed, a lobby group for global stent manufacturers, concurred. “The singular focus on controlling ceiling price of stents, without attempting to address the larger picture and correct inefficiencies in the healthcare ecosystem will not achieve its stated benefit, in the long run,

But Singh has strong support in the opposite camp.

“He has taken a very strong step. Very few people take such steps and this should happen more often,” said Birendra Sangwan, a lawyer who’s moved court to curb stent prices.

Pharma industry needs to adopt more IT tools to upgrade quality standards

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Mumbai: Indian pharmaceutical industry needs to enhance the use of information technology (IT) tools to upgrade its quality standards, key executives of drug companies said during a panel discussion at a quality excellence conference in Mumbai on Friday.

Over the last two years, pharma companies have put in efforts to improve quality compliance after several manufacturing plants came under the glare of global regulators due to violations of norms.

Data reliability, non-adherence to standard operating procedures, batch failures, contamination, and insufficient investigation of problems identified in the quality process are some of the major non-compliance issues observed at manufacturing plants.

Drug makers have started automating processes in manufacturing units and laboratories to reduce human error and maintain data integrity but the firms have not yet reached optimum levels in technology adoption.

“What has not gone up to the level that we would like is use of technology. This is a much more digital world than from where pharma companies are and certainly from where generic companies are. I think we should use technology and data a lot more,” Nilesh Gupta, managing director of Lupin Ltd, said.

“As a country we have the technology and capability to develop IT tools. We need to use those capabilities to ensure that all the data that is generated are captured electronically, so that the potential risks we carry as an industry can be significantly reduced,” Dilip Shanghvi, managing director of Sun Pharmaceutical Industries Ltd, said.

He added that one of the key challenges the company faced in its quality enhancement programme was creation of a paperless laboratory.

“We underestimated the complexity and enormity of what we were trying to do. So that project as I see is almost 12-15 months behind schedule,” Shanghvi said.

Cipla Ltd’s managing director and global chief executive officer Umang Vohra said the automation in laboratories was not as much as in manufacturing and the company has been working to address this issue.

Another area of concern remains building a culture of best practices within the organisation to improve quality standards. Companies have started training programmes for employees and increased communication on quality enhancement.

“The biggest threat to quality culture in an organisation is attrition,” Cipla’s Vohra said.

Each of the leading pharma firms has begun work to raise the quality bar. Sun Pharma has standardised quality metrics across all its plants and stopped filing products to semi-regulated markets from the plants that supply to regulated markets, Shanghvi said.

Dr. Reddy’s Laboratories Ltd has strengthened IT systems, review processes and governance, and stopped investing in older manufacturing plants, the company’s chairman Satish Reddy, said.

Meanwhile, Cadila Healthcare Ltd started a programme for cultural transformation in the company, initiated a good tracking system and discouraged marketing team to interact directly to employees in the plant in order to avoid any kind of unwanted pressure regarding product sales on plant workers, chairman and managing director Pankaj Patel, said.

Sun Pharma arm SPARC gets I-T demand notice for Rs 32.87 crore

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NEW DELHI: Sun PharmaBSE 0.75 % Advanced Research Company (SPARC) today said it has received a demand notice from income tax authorities for a sum of Rs 32.87 crore.

The company is contesting the demand, which is for the assessment year 2013-14, SPARC said in a regulatory filing.

“The company is in receipt of a ‘Demand Notice’ under the Section 156 of the Income Tax, 1961, demanding the payment by the company of a sum of Rs 32.87 crore for the assessment year 2013-14,” it said.

The company is contesting the demand and will file an appropriate appeal against this under the applicable provisions of the Income Tax Act, 1961, within the stipulated period, it added.

SPARC was demerged from Sun Pharma as a pharma research and drug discovery company in 2007.

Sun Pharma’s December quarter earnings leave investors underwhelmed

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Sun Pharmaceutical Industries Ltd’s share has fallen out of favour with investors, having lost 23.4% of its value from a year ago. The drug maker’s December quarter’s performance and commentary do not give any reason to alter that pessimism.

Sales growth in main markets such as the US and India was slower than expected. Profitability brought no good news either and declined sequentially, which was expected, but it fell sharply over a year ago as well. On its Halol plant, the news was on expected lines; the company has submitted a response to the US Food and Drug Administration, remediation work has begun and it is waiting to hear from the regulator.

Sun Pharma’s US market sales in dollar terms rose by 4% over a year ago and declined by 9% sequentially. Growth was expected to suffer as the preceding quarter had one month of exclusivity-period sales of the generic version of cancer drug Gleevec. However, the December quarter included sales of authorized generic of four versions of olmesartan, a drug to treat blood pressure. Still, growth did not hold up.

The main reason for this underperformance is continued pressure on the pricing front. In addition, disruption in supplies of unspecified products and lumpiness in sales of some products also contributed.

Surprisingly, the India business growth at 5% year-on-year too was lower than expected. While demonetization was expected to hit sales growth, its portfolio tilt towards chronic categories (ones requiring long-term medication such as cardiology or neurology) would have protected it to an extent. Normalcy has still not returned and the trade’s inability to hold inventory (due to the cash shortage) appears to have affected sales growth.

The regions that saved the day to deliver overall sales growth of 8.4% year- on-year were the emerging markets block and “rest of the world ” (RoW) markets. Growth in the RoW markets was helped by sales of products acquired from Novartis AG in Japan. Licensing income saw other operating income jump sharply over a year ago but decline sequentially.

Thus, total operating income rose by 11.1% over a year ago but fell by 4.1% sequentially. However, expenses rose sharply, due to higher material cost arising from purchases of the authorized generic products. That’s why its operating profit margin fell 52 basis points over a year ago and by 7.4 percentage points sequentially. Its profit before tax rose by 3% over a year ago, but net profit fell by 11.4% due to a higher tax incidence. Sequentially, net profit declined by 30.5%.

A quarter of unimpressive results and an outlook that appears to hinge on wait-and-watch will not be music to the ears of Sun Pharma shareholders. The company said it is trying to transfer key product approvals filed from Halol to other sites, to avoid getting stuck if the plant takes longer to get an okay. A green light to this plant remains a key event to watch out for in the near-to-medium term. If sales growth in the US and India picks up in the coming quarters, that too should perk up the sentiment somewhat.

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