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Drug price regulator demands Rs4,551-cr from drug firms for overcharging consumers

10 March 2016

Drug price regulator National Pharmaceutical Pricing Authority (NPPA) has so far imposed a combined penalty of Rs4,551 crore on various pharmaceutical companies for overcharging consumers on their products.

The amount has been sought during the life of NPPA - from 1995, when it was set up, till February 2016, minister of state for chemicals and ertilisers Hansraj Ahir told the Lok Sabha on Tuesday.

NPPA, which is tasked with regulating and fixing the prices of controlled bulk drugs and formulation packs under the Drug (Price Control) Order, or DPCO, 2013, is also responsible for recovering the amounts overcharged by drug manufacturers for the controlled drugs.

"There are 1,389 cases where the NPPA has issued notices to pharmaceutical companies for overcharging for medicines," PTI quoted the minister as saying in the Lok Sabha on Tuesday.

Recovery, however, has been slow as the NPPA, till end-February this year, could recover only Rs384.91 crore against the demand of Rs4,935.92 crore as "overcharged amount, including interest, whenever updated," the minister pointed out.

"The outstanding amount is Rs4,551.01 crore as of 29 February 2016, and Rs3,698.32 crore, representing about 82 per cent of the total outstanding amount, is under litigation in various high courts and the Supreme Court," he said.

The NPPA, he said, is actively pursuing all the court cases.

The NPPA had reportedly warned of action against manufacturers for price violation, as it found over 4,700 medicines had been priced higher than the permitted limits.

During a survey of price movement of medicines in August 2015, NPPI has observed that 4,724 pharma stock keeping units (SKUs) out of the 1,01,418 SKUs were charging consumers beyond the limit permitted by the DPCO of 2013.

"After ascertaining status in respect of the cases observed for price violation from the manufacturers concerned, the NPPA will take necessary action in such cases where price violation has been established under provisions of DPCO 2013," the NPPA said.

Meanwhile, NPPA has fixed / revised the prices in respect of 530 scheduled formulation packs is applicable ceiling prices as per the Wholesale Price Index (WPI) effective 1 April 2016 under DPCO, 2013 in a related notification.

Earlier, on 26 February, NPPA had fixed / revised the prices in respect of 45 formulation packs under DPCO, 2013.

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