Chandigarh: Over 1,000% margin, NPPA launches probe into drug pricing of three firms

Naina Mishra

Chandigarh, July 26

The National Pharmaceutical Pricing Authority (NPPA) has launched an investigation into several non-scheduled cough syrup manufacturers following a complaint filed by UT Health Secretary Yash Pal Garg regarding exorbitant drug prices.

Under scanner over exorbitant pricing

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• 1,483% margin: MCAIN Suspension (made in Solan) initially sold at Rs 18 per bottle; MRP Rs 267. Reaches consumer at Rs 226.95
• 837% margin: RICAINE Suspension (made in Mohali) initially sold at Rs 19 per bottle; MRP Rs 159. Reaches consumer at Rs 135
• 889% margin: SUFIT-O Suspension (made in Baddi) initially sold at Rs 18 per bottle; MRP Rs 160. Reaches consumer at Rs 136

The brands — MCAIN Suspension, RICAINE Suspension, and SUFIT-O Suspension — have raised concerns due to disproportionate maximum retail price (MRP) in comparison to the initial sale price.

According to the complaint, the manufacturer of MCAIN Suspension in Solan initially sold the product at Rs 18 per bottle, with an MRP of Rs 267. Subsequent sales reveal a chain of price hikes, with the syrup eventually reaching the consumer at Rs 226.95 after a 15 per cent discount. Shockingly, its MRP was found to be 1,483 per cent higher than initial sale price.

Probe into unfair trade practice

• Drastic disparity between initial sale price and MRP has raised suspicion of unfair trade practices by manufacturers and dealers
• NPPA has taken allegations seriously and initiated an inquiry; told all parties to submit relevant data within 15 days

Similarly, the manufacturer of RICAINE Suspension in Mohali, initially sold the product at Rs 19 per bottle, with an MRP of Rs 159. The product was sold at a discount, leading to a final consumer price of Rs 135. Its MRP was discovered to be 837 per cent of the manufacturer’s initial sale price.

SUFIT-O Suspension by a Baddi-based manufacturer had initial sale price of Rs 18 per bottle and an MRP of Rs 160. After a series of sales, the product reached the consumer at Rs 136 after a 15 per cent discount. It was found to be 889 per cent of the manufacturer’s initial sale price.

These brands fall under non-scheduled formulations and there are no pricing controls by the NPPA, but such drastic disparities between initial sale price and MRP raised suspicion of unfair trade practices by the manufacturers and dealers (marketers, wholesalers, and retailers) in the distribution chain.

There is also suspicion that the manufacturers and dealers might not have informed the respective State Drug Controllers and the NPPA about the MPs (maximum prices) of these non-scheduled formulations.

The NPPA has taken these allegations seriously and initiated an inquiry into the matter. The authorities are examining the details of the complaint and have requested all parties involved to submit relevant data, including pricing information and changes since 2013.

The NPPA, tasked with ensuring drug prices compliance with the Drugs (Prices Control) Order, 2013, revealed that formulations contained in the mentioned brands fall under non-scheduled formulations, allowing manufacturers to set initial prices independently.

However, the NPPA strictly monitors price increases to ensure they do not exceed 10 per cent annually. The manufacturers and marketers of the mentioned brands were found to be non-compliant as they had not submitted Form-V to the NPPA. Consequently, these companies have been directed to submit the required data separately, including the changes in Maximum Price (MP) since 2013.

The manufacturers have been told to submit a detailed list of products, launch dates, pricing details (price to stockiest and retailer and the MRP) at the time of launch, subsequent price changes and current price list for all drugs manufactured and/or marketed by the company.

The companies have been given a deadline of 15 days to comply. Failure to do so will result in appropriate action.