AstraZeneca Pharma India moves court against NPPA demand notice

The Indian subsidiary of Anglo-Swedish pharma major AstraZeneca (LSE: AZN) has filed a writ petition before the Delhi High Court challenging a demand notice from India's National Pharmaceutical Pricing Authority (NPPA) alleging overcharging of Tagrisso (osimertinib) tablets by the company.

The company received a notice of demand on June 25, 2021 from the NPPA for overcharging $21 million on the cancer drug.

The demand notice has been issued pursuant to a NPPA notification, dated February 27, 2019, whereby the Indian government had put a cap on trade margin of 42 anti-cancer medicines at first point of sale of the product.

The demand notice alleges that the company has overcharged $21 million during the period from March 8, 2019 to January 31, 2021 in respect of Tagrisso 80mg tablets. Consequently, the company has been ordered to deposit the amount within 30 days from the date of the notice.

"The company strongly believes that the NPPA has not adequately considered several submissions made in support of the company's contentions, including the fact that osimertinib is a patented drug and as such the DPCO, 2013 and the said notification dated February 27, 2019 are not applicable to osimertinib as comprehended under Para 32 of the DPCO, 2013," AstraZeneca Pharma India said in a filing to the regulators.

The company said it has carried out a thorough evaluation of the matter and is of the firm view that the demand from the NPPA is grossly erroneous and legally unsustainable.

The NPPA's order may have industry-wide implications on patient assistance programs and consequently affordability of medicines for out-of-pocket patients, AstraZeneca Pharma India said.

The notice also penalizes the company for supplying at lower rate to government institutions vide tenders as compared to Maximum Retail Price (MRP) and has noted that for purposes of accounting, the company has erroneously included the MRP and not the amount actually realised, states the NPPA demand order.