Regulator turns down pharma firms' request for hike in insulin price

Last Updated: Thu, Jul 26, 2012 18:40 hrs

Pharmaceutical companies, including Eli Lilly, Cadila, Lupin and Biocon, will have to continue selling insulin at the current price, as the drug price regulator National Pharmaceutical Pricing Authority (NPPA) has turned down their request for a rate increase. Instead, it has slashed the prices of Vitamin C-based medicines and multi-vitamins by 0.12-37.76 per cent. Drug makers like GlaxoSmithKline, Piramal and Pfizer, leaders in the segment, are likely to be affected by the move.

However, the regulator has allowed an increase in prices of Merck’s Vitamin E-based drugs and a few antibiotics and antibacterials from Alkem and Alembic.

“Some of the major drug makers had applied for a price increase of diabetic drug insulin. But, keeping consumer interest in mind, the prices have been maintained at the existing level by suitably adjusting the profit margin,” a government official said.

This is significant as Eli Lilly had last year taken NPPA to court after being prevented from raising prices of its imported insulin, since it refused to share pricing details of its imported brands for the local market. In June 2011, the Delhi High Court had asked NPPA to accept Eli Lilly’s new landed cost of insulin brands and revise prices accordingly, as Indian laws did not empower the regulator to demand cost details for imported drugs.

However, NPPA managed to keep the sting out of the order by reducing the margin on the company’s imported insulin. That means, even as NPPA accepted the higher landed cost provided by Eli Lilly, it reduced the company’s margin on the product to 17 per cent from 35 per cent earlier, keeping the MRP unchanged.

The price of an insulin product might vary from Rs 160 to around Rs 480. For instance, Eli Lilly’s 10 ml vial of monocomponent human insulin costs Rs 160.26, whereas its 3 ml prefilled pen of Humalog Kwik costs Rs 482.33.

The size of India’s insulin market is estimated at $150 million (Rs 775 crore) and is expected to grow threefold by 2015. Besides Eli Lilly, Danish firm Novo Nordisk, Pfizer and Sanofi sell imported insulin drugs. Among domestic firms, Biocon, Wockhardt and Lupin have presence in the segment.

NPPA allows up to 35 per cent of the landed cost of imported drugs as manufacturers’ margin if a local alternative is available. Otherwise, it grants 50 per cent margin.

The price cut in Vitamin C-based drugs was driven by a fall in bulk drug prices, the official said. The Vitamin C market in India is pegged at Rs 150 crore. Popular products in the segment are Piramal’s Limcee, GlaxoSmithKline’s Celin and Pfizer’s Cecon. State-owned Indian Drugs and Pharmaceuticals also manufactures a Vitamin C drug, Sukcee. Besides, various other multi-vitamins also contain as a key ingredient Vitamin C, mostly used by asthmatic patients and children suffering from dental problems. Vitamin C deficiency leads to scurvy.

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