Overcharging by Drug Manufacturers
National Pharmaceutical Pricing Authority (NPPA)/Government fixes or revises prices of scheduled drugs/formulations as per the provisions of the Drugs (Prices Control) Orders, 1995 (DPCO, 1995). Under the provisions of the prices of 74 bulk drugs and the formulations containing any of these scheduled drugs are controlled. Under the DPCO, 1995, no person can sell any formulation (medicine) of price controlled category to a consumer at a price exceeding the price notified/approved by the NPPA/ Government. In case, a company is found selling at prices higher than the price notified/approved by the NPPA/Government, action is taken against them as per the provisions of the DPCO< 1995. Since the inception of NPPA in August 1997 till 31st January 2011, demand notices have been issued in 786 cases involving total overcharged amount of Rs. 2328.53 crores, out of which an amount of Rs. 207.86 crore has been recovered which also includes recovery through court orders. Out of overcharged amount of Rs. 2328.53 crores, cases for Rs. 1930.41 crore are under litigation. 76 cases have been referred to Collectors of various States for recovery as land and revenue arrears, out of which 25 cases are under litigation, 47 cases are pending for recovery with Collectors of various States and in the remaining four cases, amount has been recovered. Action for recovery for the overcharged amount along with interest thereon is a continuous process for which action is taken by NPPA as per the provisions of DPCO 95 read with the Essential Commodities Act.
Prima-facie violation of para 8 of DPCO 1995 relating to manufacturing and marketing of scheduled formulations by companies without prior price approval of Government in respect of 39 formulation packs were referred to the concerned State Drug Controllers for taking prosecution action.
In order to ensure compliance of the notified ceiling price, NPPA calls for the control samples of the subsequent batches and the price list of the companies in respect of the formulations wherein the companies are found to have overcharged. To ensure that companies adhere to the prices fixed by NPPA, the State Drug Controllers are sensitized and asked to forward the cases relating to non-compliance of the notified price. As a part of continuous market surveillance, NPPA also procures samples of various scheduled formulations to check the compliance of the notified ceiling price by the companies.
This information was given by the Minister of State for Chemicals and Fertilizers Shri Srikant Kumar Jena in a written reply in the Lok Sabha today.
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DNM/PKM/SB