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Sun Pharma In The News

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Regulator wields axe on prices of 8 drugs

 

 
Medicine Prices Found To Be Much Higher Than Their Manufacturing Costs

 

THE country's drug price regulator has reduced the prices of eight medicines sold by leading pharma companies such as Cipla, Sun Pharma and Unichem by up to 85 %, in one of the sharpest price-cuts in the last few years.
 
The National Pharmaceutical Pricing Authori'ty (NPPA), a few days ago, slashed the maximum price at which these eight medicines could be sold after its market survey found that companies were selling them at huge premium compared to its manufacturing and sale costs: NPPA prescribes a price-ceiling for drugs containing any of the 74 chemicals that are under price-control to contain the cost of medication for consumers.
 
The prices of seven of these eight brands have been fixed by the drug price regulator for the first time. The maximum price for Cipla's popular combination antibiotic Ciplox TZ has been drasti'cally cut by 74% from ?100.73 to ?25.7 (exclud'ing taxes) for a ten-tablet strip.
 
Hemant Bakhru, an analyst with brokerage firm CLSA, said the Ciplox TZ price-cut will adversely impact the operating profit and bring down Cipla's earnings per share by 1 %. "The impact will be felt from end of this fiscal" he said. Cipla is the second-largest player in the domestic drug retail market.
 
As per industry estimates, Ciplox TZ, along with parent brand Ciplox, rakes in about Rs 100 crore for Cipla, though Ciplox, which is among Cipla's largest-selling brands, accounts for more than half of this.
 
The price of Rexcin Pharmaceuticals' popular bum ointment Silverex AV cream has been slashed by around 8 5 % to Rs 2 5 for a 2 0 gm tube. The prices of Sun Pharma and Unichem's combination blood pressure medicines'Spironolactone +Torsemide ' have been halved and will now cost Rs 21 and 24 for 10-tablet strips respectively. But a Sun Pharma spokeswoman said that there will be no impact on the company as its drug sold under the brand Aquamide has negligible revenue.
 
The regulator has slashed the price of Cosmo Life Sciences vitamins capsules Lycobal Forte by 88.7% toRs 8.90 (excluding taxes) for 10 capsules. The other medicines whose prices have been cut include JB Remedies' Nor-Tz tablets and Okassa Pharma's Burn Heal cream.
 
Most of the medicines whose prices have been. cut are combination drugs, that is drugs that have ' more than one molecule. As per Indian laws, a combination drug which contains an ingredient that is under price-control has to automatically conform to the price ceiling as mandated by the drug price regulator. But, companies launch these combination brands at much higher prices with'out taking the mandatory prior pricing approval.
 
"Many of these products are combination drugs and companies have for long been using this strategy to escape price control. NPPA should have taken such steps much earlie'r since compa -nies have already made huge profits," said CM Gulati, editor, Monthly Index of Medical Special'ities, a leading medical journal.