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NPPA modifies guidelines for change in manufacturer to allow existing market entity to produce in its own plant
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Gireesh Babu, New Delhi
August 16 , 2023
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The National Pharmaceutical Pricing Authority (NPPA) has modified the parameters in its guidelines for allowing change of manufacturers after retail price of formulations are approved, allowing the existing marketing entity to produce the medicine in its own plant.
The decision modifying the guidelines finalised in May, 2023, will be a relief to the marketing firms as they will have the flexibility to start manufacturing the products on their own, if required.
However, the Authority in its recent meeting which approved the modification, refused to accept the industry's suggestion that the change of manufacturer may be notified by way of filing Form V only, instead of seeking approval.
The NPPA, in its meeting held on July 31, 2023, added the point allowing "Shifting of manufacturing to its own plant by the existing marketing entity," to the parameters under which the change in manufacturer may be allowed by the Authority in future cases.
The parameters fixed in an earlier meeting of the Authority on May 26, 2023, to allow change in manufacturer on conditions including cancellation or seizure of license of the manufacturing company; natural calamity or civil riots leading to destruction of plant of manufacturing company; dissolution or winding up of the manufacturing company; closure of the concerned business segment by the manufacturing company, etc; or any other circumstance(s) proved to be beyond the control of manufacturer or marketer.
The onus to prove these conditions will be on the applicant company with documentary evidence and the request will be examined on a case to case basis and the earlier cases may not be treated as a precedent for future cases.
With the decision came out on June 8, the industry and industry associations came up with suggestions that the change may be notified by way of filing Form V only instead of seeking approval and change in manufacturer to produce in marketer's own plant may be allowed.
In the latest meeting, the Authority noted that the retail price as fixed by NPPA is applicable to the specific individual manufacturer and marketer who have applied for the same by submitting Form-I for price fixation as stipulated under Drugs (Prices Control) Order (DPCO), 2013 and subject to fulfillment of all the applicable statutory requirements as laid down by the Government under relevant statutes and rules, including manufacturing license permission from the competent authority, that is the Central or State Licensing Authority, by the concerned manufacturer or marketing company. The notifications are also issued in the name of a specific manufacturer or marketer. Further, the compliance to various provisions of DPCO, 2013 such as Para 20 are also seen in the context of retail price notifications issued.
"Hence, simply filing Form-V intimating the change in manufacturer may not be sufficient. Further, ensuring availability of the drug is primarily the responsibility of the marketer, hence shifting of the manufacturing from manufacturer to its own plant by the marketer may be allowed," decided the Authority meeting.
The guidelines were issued to reduce the increasing instances of companies changing the manufacturers with or without informing the authority.
The pricing authority, in the past, has allowed the marketing companies to change the manufacturer after approval of retail price in some of the cases, keeping in view of the unavoidable circumstances highlighted by the marketing companies in their submission to NPPA and this has triggered more companies coming up with such requests.
Earlier, Novartis India Ltd has approached the NPPA for its Voveran 1ml AQ - for which the retail price was fixed in May 31, 2019 with Nitin Life Sciences Ltd as manufacturer - informing that in order to support environmentally sustainable business through reduction in supplier footprint, in line with the company’s commitment as per the Environmental Social and Governance (ESG) Policy they plan to get the drug manufactured from another manufacturer Sovereign Pharma Ltd, Daman under the existing brand. It also proposed changes in six to seven excipients, which was later confirmed by the drug regulator as not substantial and does not require a separate license. Based on the information submitted, the Authority permitted the change in manufacturer.
“This was also keeping in view the overall vision of the government for promoting Ease of Doing Business,” said NPPA after the Authority meeting on May 26.
However, the Authority said, it has observed that subsequent to the application of Novartis, companies started applying to NPPA on a routine basis for change of manufacturer and are now merely intimating about the change citing reasons including change in business strategy, planning to manufacture the formulation at their own plan, etc.
The Authority also permitted Gujarat-based Torrent Pharmaceuticals Ltd to change the manufacturer for its chlorthalidone 12.5mg + telmisartan 40 mg tablet. The company drew attention to certain guidelines set through an office memorandum in November, 2017 and the authority decided that in case the applicant marketing company intends to change the manufacturer for a formulation having the same brand for which retail price has already been provided, it may be allowed to continue to market the formulation with the same brand with the changed manufacturer at the price not exceeding the present applicable retail price.
Torrent Pharma later again approached the Authority informing that due to change in business strategy, it proposes to manufacture brands Rozucor Gold 10 and Rozucor Gold 20, which were manufactured by Synokem Pharmaceuticals and approved by the NPPA, on their own under the existing brand. The Authority permitted the change in manufacturer for these brands also, subject to certain conditions.
“The Authority noted that the change of manufacture was allowed to the companies keeping in view the provisions of the DPCO, 2013, the guidelines and specific circumstances of the company concerned. However, it is observed that companies are making it a routine affair and have started making unauthorised use of the same without seeking permission from NPPA,” it observed.
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