The Centre may set up a `settlement commission' and offer a one-time settlement to recover the huge dues from the companies which were found overcharging drugs, as most of the current cases in this regard are stuck up in protracted litigations and court stays.
The Government is weighing the option, in consultation with leading industry organizations, to set up a commission with wider powers to decide the contested recoverable amount in a summary manner after hearing both sides even on pending cases before the courts. And exactly in line with the amnesty being given to income tax defaulters, one-time settlement may be offered to drug companies too, according to government sources.
The amount so recovered would be put in a special fund called `price monitoring and public awareness fund', housed in the NPPA, to be used for increasing public awareness, supporting studies on price control and consolidating infrastructure of the NPPA.
Most of the cases of old dues of Drug Price Equalisation Account (DPEA) under the DPCO are being disputed by the industry and under prolonged litigations. As companies are required to keep account of records for just 15 years, some cases may get delayed even further, causing loss to the public exchequer.
With more drugs planned to be brought under price control as per the proposed policy, the scope of the fund is viewed to be more important and a settlement commission would be the better option in this regard, it is felt. The fund may be operated by an empowered committee headed by Secretary, Chemicals and Petrochemicals.
According to available records, about 250 pharma companies owed nearly Rs 700 crore as due and the NPPA could recover only Rs 100 crore after trying for 10 years now. Most of this amount is in litigation and there is uncertainty about its quantum and final recovery. Settlement Commission can help finalization of the amount and enable it to be spent on certain drug related activities. This amount is presently deposited in the Consolidated Fund of India.
This fund would be utilized for expenditure on public awareness about drug prices of generics, comparative drug prices, banned drugs, misbranding, facilities given by government for different categories of patients or any other aspect of public interest through the use of print and electronic media. It would also help meet expenditure for operating and strengthening of the price monitoring mechanism of NPPA on a continuous basis and other infrastructure-boosting activities of the NPPA.
Studies can be funded with this amount on the drug prices, production and availability of drugs, impact of patents on drug prices ,studies/data required(in India or abroad) for negotiation of prices of patented drugs and various other aspects pertaining to drugs and drug prices.