Mumbai, Feb 19: Lupin Chemicals, Gujarat Themis Biosyn Ltd (GTBL) and Ciba CKD have filed review applications with the ministry of chemicals and fertilisers and the National Pharmaceutical Pricing Authority (NPPA) against the recent reduction in prices of rifampicin. They are the only producers of rifampicin, the country's largest selling anti-TB and anti-leprosy bulk drug. The review applications comes after the government had reportedly pre-empted the producers from taking legal recourse by filing a caveat in the Bombay high court. Several major corporates had earlier successfully obtained stay orders against implementation of price cuts notified by the government.A February 2 government order has reduced the price of rifampicin to Rs 4,707 per kg from Rs 5,220 per kg, a drop of about 10 per cent. Though all three producers are yet to hear from the government on the review application, the controversial price cut is expected to have a negative impact across the board.
Industry sources said in the caseof Gujarat Themis the price reduction could actually take the company back to the doors of the Board of Industrial and Financial Reconstruction (BIFR) at a time when it has just successfully managed to move back to the growth path.
The youngest producer, Ciba CKD, with a rifampicin capacity of about 125 tonnes has a technological edge, though the price cut may hurt it anyway. Ciba CKD has invested about Rs 110 crore in its greenfield project.
The industry is apparently unhappy with the government order as it does not take into account the weighted average cost of all three producers, more so since Ciba CKD had already gone into production. The government had apparently based its price cut on the principle of two-third cut off wherein Ciba CKD's costs were excluded from the calculations since only projected figures were available.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
