Pharma firms earn high margins; govt asked to cut MRP of drugs

Allowing pharma companies to earn excessive profit is against the principles of morality and ethics, the National Consumer Commission has said, directing the Centre to reduce the MRP of a drug for checking effects of non-cancerous tumor on which Novartis makes over 100 per cent gain.


National Consumer Disputes Redressal Commission (NCDRC) bench noted that the MRP of Octreotide LAR 20mg (Sandostatin LAR) by Novartis India Ltd is Rs 58,000 per injection and the company had provided 50 per cent discount to a patient and sold it at Rs 29,000.


"...it must be borne in mind that the MRP fixed by the Ministry of Health or Ministry of Commerce or any other Ministry, is on the higher side. The Opposite Party (Novartis India Ltd) has earned more than 100 per cent of the profit. Steps should be taken to re-fix the MRP so that the consumers should not suffer. Giving so much profit to the companies, who make such like medicines, is against the principles of ethics and morality. Copy of this order be sent to the Ministry of Health for its notice," the NCDRC bench, presided by Justice J M Malik, said.


The bench, also comprising its member Dr S M Kantikar, however, allowed the company's revision petition against Kerala State Consumer Commission which had asked it to pay over Rs one lakh to the family of a 17-year-old patient who was operated for brain tumor and later on developed a disorder of excess production of growth hormone due to which he was growing taller. He later died.


He was talking of the firm's Octreotide LAR 20mg drug which is given to check acromegaly, a rare endocrine disorder leading to enlargement of hands, feet and internal organs and changes in facial structure. Majority of acromegaly cases are caused by a non-cancerous tumor.


The bench allowed the company's plea saying nobody can charge the amount more than the MRP but it can be sold at the lower rate than the MRP.


It said that by no stretch of imagination, it is said to be an unfair trade practice and there lies no impediment in giving the medicine below the MRP.


The case deals with the complaint of Kerala resident J Anto whose 17-year-old son Tomes Anto had undergone a surgery for brain tumour. He remained sick for some time and started growing taller due to excess production of growth hormone.


They consulted a doctor at Department of Endocrinology, Christian Medical College, Vellore, who prescribed octreotide LAR 20mg injection which was to be given on monthly basis and cost them Rs 58,000.


The treatment, which started on April 30, 2008, did not give the desired result but the doctor suggested it be continued.
Initially, the company sold the drug at Rs 58,000 but later on it gave them a discount of around 50 per cent bringing down the price to Rs 29,000 per month.


Later, the doctors adviced the patient to discontinue the medicine.


The complainant had to purchase eight injections amounting to Rs 3,60,008. He submitted had the discount been given for the earlier purchase, he could have saved Rs 1,17,872 while asking the company to refund of the amount.


The district consumer forum and state consumer commission had allowed his plea giving similar finding.


The company had contended the patient was supplied the medicine on discount only after he was enrolled with its newly-launched programme STAR Sandostatin Lar Cares.


It added subsequent injections were given to the patient at the concessional rate which is below the MRP.

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