Whistleblower Reports Unfair Price-Fixing of Diabetes Drug to NPPA

NPPA said it will look into any issue that is brought to its notice, while the drug companies have denied reports.

Picture is for representational purposes. (Photo: iStockphoto)

The government recently released the report of a survey, which revealed that 20 percent of Indians are suffering from diabetes. An anti-diabetic drugs market of almost Rs 10,000-crore, it caters to this shocking proportion of the population.

In a move that may shake up this market in the country, a whistleblower has written to the National Pharmaceutical Pricing Authority (NPPA), alleging that four leading pharmaceutical companies are colluding to set the price of anti-diabetic drug Vildagliptin at artificial levels, reports The Economic Times.

The report says the government agency will look into the allegations that these companies have gone against fair trade practices by keeping the prices of various brands of Vildagliptin at unfair levels.

When The Quint contacted NPPA chairman Bhupendra Singh regarding the news, he refused to react to media reports, but added that they take note of any development in the field.

I wouldn’t react to media reports. However, we take note of what’s happening and will look into any issue that has been brought up.

Bhupendra Singh, Chairman, NPPA

Swiss drugmaker Novartis, sells its proprietary drug Vildagliptin under the brand Galvus, and has licensed it to three other companies, which sell it in India under different brand names. US-based company Abbott sells it as Zomelis, and domestic companies USV and Emcure as Jalra and Vysov respectively. These are prescribed for patients with Type 2 diabetes.

The letter alleges that Norvatis has control over the pricing structure which is followed by the three other companies. They also match every price change, although, without any written communication between them, said the alleger.

The letter to NPPA read:

Though business agreement does not specify the control that Norvatis exercises on its co-marketer partners in terms of controlling the market and pricing, but in reality, all these companies have formed a price cartel, both in trade business and institutions business.

According to the report, all four brands of the drug are sold in the same price range.

The report reads: “Ten 500mg tablets of Novartis’ Galvus and Metformin combinations cost Rs 258, and so do such combinations of Jalra by USV and Vysov by Emcure. Abbott’s Zombis costs Rs 235.”

Norvatis and Abbott denied the allegations and said they haven’t received any word from NPPA regarding a complaint against their drug. The former added that all their “business partners have the freedom to set their prices for the products where they have marketing/sales agreements with us and we do not decide their MRPs”.

Abbott also said that they decide the price of Zomelis in trade channels, and do not discuss it with other companies.

The letter goes on to say that the same pattern is followed in government and institutional businesses, where large tenders are cornered by one company monopolising the market. And it is made sure that no one else quotes a price lower than that of the company during the tender process.

All this goes against the fair trade practices and leads to Indians not getting low-cost medicines. This practice is alleged to be rampant in the industry. How NPPA reacts to these allegations and what action is taken is yet to be seen.

(Source: The Economic Times)