The National Pharmaceutical Pricing Authority (NPPA) has slapped a fine of Rs300 crore on Swiss pharmaceutical giant Novartis, reportedly for overcharging consumers for its popular painkilling medicine Voveran.
The NPPA had, in May 2013, put diclofenac, a key ingredient of Novartis' analgesic brand Voveran, under the government's direct price control.
With annual sales of about Rs225 crore, Voveran was among the top 10 brands in the domestic drug retail market as of April this year, according to IMS Health annual data. A strip of 15 Voveran SR 100 mg tablets currently costs Rs102, while one of 50 mg comes for Rs74.
NPPA has served a show-cause notice on Novatis to explain in two weeks why action should not be taken against it for overcharging.
While the NPPA has ventured into controlling prices of more and more essential drugs that are currently outside the National List of Essential Medicines (NLEM), pharmaceutical companies have been challenging the NPPA's move to fix prices of drugs that are outside the NLEM.
Under the Drug Price Control Order (DPCO) 2013, the government already controls the prices of 348 drugs listed in the National List of Essential Medicines (NLEM).
Under pressure from multinational drug companies, the department of pharmaceuticals has withdrawn the guidelines issued on 29 May that authorised the NPPA to fix prices of drugs that are not on the essential medicines list.
However, the government's order has not affected NPPA's control over medicines like Voveran where the ingrediants are still in the NLEM.
Novartis India has declined around 3.5 per cent in early morning trade at BSE on account of being penalised by National Pharmaceutical Pricing Authority (NPPA)
The stocks opened at Rs675 and hit a low of Rs651 with around 9,000 shares changing hands on BSE counters, so far.