New Delhi: India’s drug price regulator, the National Pharmaceutical Pricing Authority, or NPPA, has recovered some Rs123 crore in fines from drug makers who sold medicines in dosages and strengths that were not approved by the watchdog.

Revision time: A chemist’s shop in Ghaziabad, UP. NPPA has revised prices of six bulk drugs, including those for the treatment of diabetes. Rajeev Dabral / Mint

“We have already sent notices to 555 manufacturers who were altering their brands," NPPA chairman A.K. Banerjee said, declining to name the firms or specify the period during which the alleged violations took place. The total levy would add up to almost Rs1,582 crore, Banerjee added.

Drug manufacturers argue that such changes in their drugs have been carried out with the approval of the country’s drug quality regulator, the drug controller general of India.

“More than to skirt the price control, these changes are made for better efficacy of the drug," Dilip G. Shah, secretary general of Indian Pharmaceutical Alliance, or IPA, a lobby of local drug makers said. “If we did away with cost-based price control then this practice would decline," he said.

Separately, NPPA has revised prices of six bulk drugs, including those that go into making medications used for treatment of diabetes, infections and asthma or other pulmonary conditions.

The drugs go into making about 10% of medicines sold in India (worth some Rs22,000 crore), said B.N. Singh, managing director of Alkem Laboratories Ltd and director of industry body Indian Drug Manufacturers' Association, or IDMA.

The new prices, decided and notified at a meeting on 24 September, will be effective 15 days of that order, Banerjee said.

Bulk drugs, or the chemicals that go into making a drug, account for more than 70% of the cost of a formulation.

The drugs that have now faced price revision are sulphamethoxazole, potassium penicillin G, potassium penicillin V, benzathine penicillin G, salbutamol sulphate and human insulin. The move will allow drug makers battle rising bulk drug prices.

The prices of human insulin (used for controlling diabetes), benzathine penicillin G and sulphamethoxazole (both go into making anti-infective drugs) have been raised while the other three bulk drugs have seen a reduction in prices.

The price of Insulin has been raised to Rs33.9 lakh a kg from Rs32.2 lakh, benzathine penicillin G to Rs3,319 a kg from Rs2,670, and sulphamethoxazole to Rs397 a kg from Rs361.

The price revision still may or may not be up to the scale of the market price of the bulk drug.

However, it will allow for some scope of movement in the prices of final formulations.

“This price revision by the NPPA means that the manufacturer, who was earlier paying the difference between the market price and the NPPA- fixed price through his own pocket, will now be able to recover, partially or fully, the actual cost of procurement," said IPA’s Shah.

IDMA’s Singh said the NPPA decision to increase some bulk drug prices would help make the drugs made of them available in the market “because today owing to losses incurred, there is shortage of drugs". He did not name the drugs that were in shortage.