NPPA asks Cipla to pay for overcharging on drugs

Mumbai-based drug firm Cipla said yesterday disclosed that it has been served notices by the drug price regulator National Pharmaceutical Pricing Authority (NPPA) for alleged drug over-pricing.

The company has received a demand notice for Rs64.30 crore, which includes Rs43.29 crore for overcharging on asthma drug Salbutamol and interest of Rs21.10 crore up to June 2009, it said in a filing with the Bombay Stock Exchange.

In another notice served on it, the company said the regulator has demanded Rs2.19 crore comprising Rs1.45 crore for alleged overcharging for the drug Norfloxacin used for treating infections and an interest of Rs74 lakh. The notice relates to the prices the company charged for the drug during the period October 2005 and March 2006.

The company has said the notice runs counter to a Supreme Court ruling and the demand was not tenable. The company said the demands are contrary to the order of the Hon'ble Supreme Court of India and according to the legal advice it has received the demand was not tenable and sustainable.

Cipla, originally founded in 1935 as The Chemical, Industrial & Pharmaceutical Laboratories by Khwaja Abdul Hamid, is a leading Indian pharmaceutical company. The company is best known outside India as a maker of low-cost anti-AIDs drugs for HIV-positive patients in developing countries.

Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control and depression. Among the hundreds of generic medications the company produces for international distribution, perhaps the best known are atorvastatin, amlodipine, fluoxetine, venlafaxine, hydrochloride and metformin.

Cipla's pioneering treatment for AIDS comprising a three anti-retroviral drug cocktail has now become a standard treatment for the disease. The company's formulation Triomune contains a fixed-dose combination of three ARVs (Lamivudine, Stavudine and Nevirapine). The drug would have been difficult to develop elsewhere considering the ARVs had been patented by three different companies.