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Drug firms in dock for selling medicines above NPPA fixed prices

Drug firms in dock for selling medicines above NPPA fixed prices

The pricing anomaly has been caught by National Pharmaceutical Pricing Authority which has filed 22 cases this year alone, sending out demand notices that add up to Rs 221.78 crore.

(Photo: Reuters) (Photo: Reuters)

If the rising cost of private healthcare wasn't bleeding patients dry already, the government has now found that top pharmaceutical companies continue to sell medicines above officially fixed prices.

The pricing anomaly has been caught by National Pharmaceutical Pricing Authority (NPPA) which has filed 22 cases this year alone, sending out demand notices that add up to Rs 221.78 crore.

Only Rs 54.23 crore of this has been recovered from pharmaceutical companies so far.

It's a disease that refuses to go away. The NPPA registered 1,040 cases between 1997 and June 2014 against major companies.

Of the total Rs 3,603.04 crore of the overcharged amount, interest included, the NPPA has only been able to recover only Rs 341.11 crore from pharma companies in these 17 years.

"This move from the government is good that they have registered cases against pharmaceutical companies because they are overcharging the consumers. But more important is outcome of all the actions by the government. It is equally important that the government gets success in price control in the best interest of consumers," said Indian Pharmaceutical Congress Association President Atul Kumar Nasa.

A FINE STORY

Cadila Healthcare was been found to be overpricing Deriphyllin 300 that is used by asthmatics in 2007-08 and slapped with a Rs 11.95 crore fine.

The government is yet to recover the money from the company. In the same year, Cipla earned Rs 184.57 crore by charging extra for Ciplox-TZ. The government is yet to recover the money in that case too.

Dr Reddy's Laboratories has yet to release an amount of Rs 10.71 crore for overpricing Norfloxacin, a popular antibiotic. The company was slapped with Rs 28.49 crore as recovery amount.

The NPPA has also been unable to recover an amount of Rs 79.37 lakh from Glaxo India Limited for overpricing theophylline-based formulations (Theo-PA Tabs.) Consumer right activists have been raising the issue of recovery from the pharmaceutical companies repeatedly.

"I have been writing to the NPPA for long that overcharged money is the consumers' money and it should be given back to them. I have recently written to the Drug Controller of India (DGI) that the total money demanded should be recovered without any further delay and it should be transferred to the Consumer Welfare Fund which comes under the Ministry of Finance and maintained by Ministry of Consumer Affairs," said Bejon Misra, a consumer rights activist working in the field of medicine.

"Whenever pharmaceutical companies have been found to be selling some of their medicines to the consumers at a price higher than the price notified by the NPPA, cases are registered against such companies. Demand notices have also been issued to such companies amounting to over Rs 3,600 crore for selling medicines at a price higher than the price fixed by the NPPA," Nihal Chand, Minister of State for Chemicals and Fertilisers, said in the Lok Sabha on Tuesday.

PRICE CONTROL

The Drug (Prices Control) Order 2013, empowers the NPPA to regulate prices of 348 essential drugs.

As per the new DPCO 2013, all strengths and dosages specified in the National List of Essential Medicines (NLEM) are under price control.

Prior to the 2013 regime, the DPCO 1995 included 74 bulk medicines within its ambit and the pricing of the drugs were fixed on the basis of manufacturing costs declared by the drug manufacturers.

The order said: "...notwithstanding anything contained in the order, the Government shall by notice, require the manufacturers, importer or distributor or as the case may be, to deposit the amount accrued due to charging of prices higher than those fixed or notified by the Government, under the provisions of Drugs (Prices Control) Order, 1987 and Drugs (Prices Control) Order, 1995 under the provisions of this Order."

DRUG PRICE MANIPULATION

NPPA has registered 1,040 cases against pharma firms selling medicines above the price notified by it.

Demand notices have also been issued to such companies for selling medicines at a price higher than the price fixed by the NPPA. The Drug (Prices Control) Order, 2013 empowers the NPPA to regulate prices of 348 essential drugs.

Of the total Rs 3,603.04 crore of the overcharged amount including interest rates, the NPPA has been able to recover only Rs 341.11 crores from the pharma companies in 17 years.

In 2014 only, 22 cases have been filed and demand notices of Rs 221.78 crores have been issued. However, only Rs 54.23 crore have been recovered from these pharma firms by the government.

In association with Mail Today