The National Pharmaceutical Pricing Authority has sent show-cause notices to these companies alleging overcharging for the combination drug used to treat the potentially fatal Hepatitis C virus that harms the liver, said people familiar with the development.
While NPPA had set this drug's retail price in November, four companies started selling their versions as early as May 2017 for about Rs 1,000 more, without prior price approval from the regulator.
Notices were sent to Hetero Labs, Cipla, Natco Pharma, Mylan Pharmaceuticals and Dr Reddy's for overcharging for a combination of sofosbuvir (400 mg) and velpatasvir (100 mg), the regulator said in an emailed response to ET. Natco, Mylan and Hetero responded to the notices last week and the replies are "under examination," it said.
NPPA sought to know how the companies arrived at the prices of their drug brands without due regulatory submissions and approvals, a person familiar with the development told ET on condition of anonymity. The notices specify recovery of overcharged amounts, penalties, a charge of 15% interest and prosecution measures as per the Essential Commodities Act. uantification of overcharging liability with interest and penalty to be calculated after examination of companies' replies... a penalty not less than 100% of the principal amount shall be imposed in such cases," NPPA told ET.
Some companies that received the notices said although they had sought pricing price approval before launching the drug, the NPPA had delayed in setting the retail prices."It took months to get this (price) approval but in the meantime our patients were demanding (the drug)," said an executive of one company on condition of anonymity. About 60 lakh people in India have Hepatitis C and require access to such medicines, the person added.
NPPA approved a price of Rs 15,625 for the sofosbuvir-velpatasvir combination, excluding taxes, according to a November 2017 notification. Including the Goods and Services Tax, the maximum retail price of the drug is Rs 17,500.
Most brands of this combination were sold at Rs 18,500, according to minutes of an NPPA meeting held that month. Hetero, Dr Reddy's and Natco were among the first to launch the product in India in May 2017.
"We have received a preliminary notice from NPPA routinely asking for certain information on the product in question.
We are in the process of collating such information to respond to NPPA," a Cipla spokesperson told ET, adding that no penalty has been levied on the company.
Dr Reddy's did not share any response with ET. Hetero said it has no comment to offer. Natco and Mylan did not respond to ET's queries.
Seven sofosbuvir-velpatasvir brands, which are generic versions of California-based Gilead Sciences Inc's Epclusa, are available in India.
Other companies that have introduced the product include Abbott and Cadila Healthcare, but it could not be confirmed if they were charged under a similar violation. Abbott, which sells it Velpaclear for Rs 17,500, denied receiving any notice from the NPPA. An email sent to Cadila remained unanswered.