India should be proud of its pharmaceutical industry for two things today. First, this industry could bring down the essential drug prices in the eighties with its ability to successfully adopt reverse engineering and make bulk drugs far cheaper than MNCs. Secondly, it could grow to a key supplier of generic drugs to the international pharmaceutical markets by nineties. Indian pharmaceutical industry continues to excel remarkably well by acquiring a number of manufacturing and marketing facilities in the US and Europe. While this sector is having such excellent track record in the country's industry space, continuing legal fights engaged in by some of its members with the government after overcharging of several controlled drugs from 1995 is quite a disturbing thought. Shortly after the DPCO,1995 was notified, NPPA had found that several pharma companies including the top ones violating the price control norms by overcharging a number of drugs with their contentious justifications. These cases are in various courts and as per the NPPA's estimate, 249 pharma companies have to deposit over Rs 700 crore with the government for overcharging. Of this, a sum of Rs 99.16 crore has been recovered by NPPA up to March 2006. And out of total number of notices issued by NPPA for recovery of different amounts over the years, nearly 50 cases of overcharging are involving major companies like Ranbaxy, Cipla, Dr Reddy's, Cadila Pharmaceuticals, Nicholas Piramal, Sun Pharma, Wockhardt, Glaxo India and others. Many of the small pharma companies cleared their dues instead of fighting in the courts. In the case of Cipla alone, the amount to be recovered is estimated at Rs 359.58 crore for overcharging formulations of salbutamol, cloxacillin, ciprofloxacin, norfloxacin, etc. Cipla was served notice to deposit an amount of Rs 100 crore in September 2003 but nothing much has been realized yet. Ranbaxy had paid an amount of Rs 23.47 crore out of a total outstanding amount of over Rs 50 crore. Dr Reddy's has paid an amount of Rs 11.43 lakh as part of its dues in 2005. Both these partial payments were for overcharging of ciprofloxacin formulations and these payments were received only on account of court directives. In fact the Supreme Court order in August 2003 had directed all drug companies to first deposit 50 per cent of the overcharged amounts as calculated by NPPA before contesting in courts. But the cases are still dragging on. With extremely slow progress in finally disposing of these cases, the government has now decided to come out a Settlement Commission by offering a one-time settlement option to the companies in line with amnesty being given to Income Tax defaulters. What the government intends to do is to assign wider powers to such a body to decide the contested amount in a summary manner after hearing both sides. The amount so recovered will be kept in a `Price Monitoring and Public Awareness Fund' with the NPPA, to be used for increasing public awareness about generic prices, comparative drug prices, banned drugs, misbranding and for consolidating infrastructure of the NPPA. This seems to be an excellent initiative from the government and pharmaceutical industry needs to fully cooperate by settling the overcharging issue once and for all.