The National Pharmaceutical Pricing Authority (NPPA) has started serving notices to the pharmaceutical companies asking them to pay back 50 per cent of the overcharged prices on the seven bulk drugs, which came under price control after a recent Supreme Court verdict. The major companies who are being receiving the NPPA notices with regard to the overcharging of Ciprofloxacin, Norfloxacin, Doxycycline, Salbutamol, Theophylline, Cloxacillin and Glipizide are Cipla Ltd, Ranbaxy Laboratories, Okasa Pharma Ltd, Unichem Laboratories, USV Ltd etc.
Among the companies Cipla and Ranbaxy have been asked to deposit Rs 100 crore and Rs 25 crore respectively. This is 50 per cent of the excess amount calculated on the basis of the difference between the market price and the government-notified price upto year 2000. The companies would have to deposit the amount within a month now.
In addition to these major companies there are about 50 manufacturers who have violated the notified prices and are liable to face action under the Drugs Price Control Order (DPCO). NPPA is in the process of sending notices to all these companies.
While NPPA would give notices for the recovery of overcharged prices based on its calculations till Year 2000, the rest of the amount would come only after lengthy verification. According to senior officials, the calculation itself would take months as parameters like the bulk drug, the company, monthly price variations in the case of each company and each drug etc are all to be looked into before they could reach at a figure that corresponds to the exact overcharged price.
The SC has in its recent verdict set aside the judgment of the Mumbai High Court which freed these bulk drugs from price control. It has asked the HC to consider afresh the relevant aspects concerning the criteria laid down in para 22.7.2 of the Drug Policy, 1994 in relation to each drug, having due regard to the observations made in the judgment.
The also felt it "proper to give liberty to the appellant and the concerned statutory authorities to recover 50 per cent of the over charged amounts pending fresh determination by the High Court".
"Accordingly, we direct stay of recovery of 50 per cent of the over charged amount subject to the payment of remaining 50 per cent within the period of four weeks from the date of communication of the amount payable by each of the writ petitioners," it said.
Meanwhile, the NPPA has asked informed the manufacturers of the seven bulk drug(s) and/or its formulation(s) to comply with the NPPA fixed/notified prices. The manufacturers have been advised to suitably revise the bulk drug / formulation prices and submit copies of supplementary price lists to NPPA / State Drugs Controllers and Dealers as required under para 14(3) of DPCO, 1995. It also cautioned that the companies who violate the price stipulations would be liable to deposit the overcharged amount to the Govt. under para 13 and also liable for prosecution under para 24 of DPCO, 1995 issued under Essential commodities Act, 1955.