Supreme Court : NPPA to recover more than Rs 1,000 Crore from drug makers

New Delhi: National Pharmaceutical Pricing Authority has initiated a move to recover an amount of more than Rs. 1,000 crore from drug makers allegedly involved in overcharging patients on more than a hundred medicines. More than 100 companies are likely to be affected by this decision, confirmed a government official to ET.

The move comes in light of an order of Supreme Court supporting the initiative of NPPA to control prices of some of the non-essential medicines.

While, the amount Rs 1,000 crore is a tentative amount and may increase with inclusion of interest that the NPPA will levy on firms.

An official told ET that the authority will study the issue with all the companies on a case-to-case basis. To begin with the process, the drug price controlling watchdog has started sending notices to pharmaceutical companies. The notices demand information on the quantity of formulations that the companies produced during the phase that the Bombay High Court had granted the drug makers interim relief, confirmed a government official earlier.

When asked on the implementation of the court order, for recovery of prices from companies, an official from the authority stated that the recovery and follow up of the Supreme Court judgments is a natural process and that the authority will do away with the process under the guidelines of the court.

This latest development of NPPA comes even as the government considers disbanding the authority claiming an adverse effect on smooth business movement within pharmaceutical firms and excessive control.

Read Also: National Pharmaceutical Pricing Authority likely to be disbanded soon

Meanwhile, NPPA is also expected to recover an amount around Rs. 2,200 crore from 5-8 companies, including Cipla, BSE 6.25 % and Dr. Reddy’s in a separate overcharging case, which the authority won in the Supreme Court on October 21, 2016.

Read Also : Supreme Court judgement blows Cipla for overpricing, slaps Rs 1700 cr fine

 

Crucial Decision:

It was two weeks ago that the Supreme Court had dismissed a petition by Indian Pharmaceutical Alliance (IPA), an association of top Indian drug makers, which was laid in the court to block a July 2014 NPPA order, claiming control over prices of 108 anti-diabetic and cardiovascular disease medicines that were not a part of the National List of Essential Medicines.

The notice of NPPA hit a controversy with the industry blaming the authority of exceeding its brief. The apex court has now approved of the NPPA’s decision.

DG Shah, secretary general at IPA, said, “the association is seeking advice from legal experts on the future course of action following its defeat.”

The Indian Pharmaceutical Alliance first challenged the notification which asked for capping of prices of non-scheduled formulations by companies including Sun pharma,Dr. Reddy’s labs and Lupin at the Bombay High Court.