The ₹300-crore show-cause notice issued by the National Pharmaceutical Pricing Authority to Novartis, involving its pain-killer Voveran, has strained an already uneasy relationship between the industry and its price regulator.

The NPPA show-cause to the multinational was allegedly for overcharging consumers and Novartis has two weeks to respond. But as one industry representative, speaking on conditions of anonymity, points out Voveran’s total revenues were ₹225 crore, while the penalty slapped on it was ₹300 crore.

The pitch gets further queered as Novartis was already in the Delhi High Court contesting price control over a variation of Voveran, which accounted for just 10 per cent of the total Voveran brand’s revenues.

Other variations are already under price control, an industry representative said.

The NPPA officials were not reachable, despite repeated efforts, for their version on the course of events that lead to the show-cause being issued against the multinational. A Novartis spokesperson, meanwhile, confirmed receipt of the show-cause.

“However, the basis of the demand itself has been challenged by us before the Delhi High Court,” the spokesperson said, adding that further comment was not possible since the issue was in Court.

The timing of NPPA’s show-cause has sent jitters across the pharma industry which had several price-related run-ins with the regulator.

Like Novartis, a bunch of companies of domestic and multinational hue, had approached the Delhi High Court over an earlier NPPA diktat that had asked them to implement reduced prices on their packs in 45 days from notification, last year.

Price control

And even as these discussions were on, Novartis was slapped with a show-cause, an industry official said, adding that other companies were now nervous if similar notices are headed their way.

Under the Drug Price Control Order (2013), all 348 medicines in the National List of Essential Medicines were brought under price control. And companies were asked to sport the revised prices within 45 days of the NPPA notifying the revised prices.

Companies, including Cipla, Novartis and others, had gone to Court over the implementation timeline, among other things, as it was a logistic nightmare.

Recently, the Delhi High Court had told the industry to resolve its issues regarding the implementation of price control with the NPPA and come back to the Court by October 30.

The NPPA’s latest directive throws an entirely new spin on the on-going discussion.

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