NPPA slaps Rs 300-crore penalty on Novartis

Drug major Novartis has been slapped with a Rs 300-crore (Rs 3 billion) penalty by drug regulator NPPA for overcharging consumers on sale of Voveran, its best-selling painkiller medicine.

The Swiss drugmaker, which did not confirm the quantum of the total penalty by the the National Pharmaceutical Pricing Authority (NPPA), said the notice is "erroneous and entirely misconceived".

"Novartis has received a notice from NPPA and will duly respond to the same. Novartis believes the show cause notice to be erroneous and entirely misconceived and Novartis will challenge both the basis of the demand as well as the entire quantum of the demand," Novartis India Ltd today said in a filing to the BSE.

Novartis had already filed a Writ Petition (prior to issue of the SCN) before the Hon'ble Delhi High Court and the matter is sub-judice, it added.

According to industry sources, the company has been slapped a notice of around Rs 300 crore by NPPA for overcharging consumers on sale of Voveran.

Novartis' analgesic brand, Voveran, is based on diclofenac, a component that is under the government's direct price control.

According to IMS Health annual data, Voveran, with annual sales of about Rs 225 crore (Rs 2.25 billion), was among the top 10 brands in the domestic drug retail market as of April this year.

Last month, the NPPA had withdrawn internal guidelines issued by the drug price regulator to cap prices of non-scheduled drugs.

On May 29, the National Pharmaceutical Pricing Authority (NPPA) had issued internal guidelines, which sought to fix prices of non-scheduled drugs in various therapeutic areas, including cancer, HIV/AIDS and diabetes -- the MRP for which exceeds 25 per cent of simple average of medicines in those groups.

The guidelines also sought to control the launch price of non-scheduled formulations by capping the price of any new brand at par with the price of the highest brand in the segment.

Under the Drug (Prices Control) Order of 2013, the government already controls prices of 348 drugs in the National List of Essential Medicines (NLEM).