With the national price regulator National Pharmaceutical Pricing Authority (NPPA) acting tough by initiating moves including attaching of properties of defaulters, the recovery trend in the overcharging cases has picked up slightly, but the number of demand notices has gone up remarkably in the current year so far.
According to the information compiled till February 15, the NPPA has sent demand notices in 511 cases, including over 110 cases during the current year. The pending amount for recovery stood at a whopping Rs 1441.98 crore, while it could recover only Rs 104.30 crore so far. One of the major reasons for the slow pace of recovery is that out of the total cases, 87 per cent are held up in litigation. Though only 75 cases are pending in the court, it meant Rs 1333.85 crore in dispute and only Rs 81.14 crore could be drawn through court battles.
Hinting at renewed and vigorous action, NPPA sources said the regulator is pursuing the court cases constantly and would take action against more companies by attaching the properties. It has already initiated action against 5 companies and more cases would be identified in a couple of weeks.
The number of demand notices has gone up from 40 in 2005-06 to 60 in 2006-07 and 110 till February 15 this financial year, indicating the active intervention of the NPPA in pinpointing the defaulters. But on the recovery side, it could just mop up Rs 4 crore so far this year from the defaulting companies, but still better compared to below Rs 2 crore in the previous year. However, compared to the 12 crore recovery in 2005-06, the current year's figure remained a poor low, notwithstanding the active role of NPPA.
The agency revised prices of 776 formulations in the scheduled category this year so far. Prices were increased for 60 packs and decreased for 256 packs. As many as 447 formulations were brought under price control for the first time this year in the category so far. The trend of decrease in prices of scheduled medicines continued at more than 80 per cent over the last three years. The percentage of first time price fixation has increased from 44 in 2004-05 to 58 this year.
The proportion of ceiling prices to non-ceiling prices has reversed. The ceiling prices, which were nearly 42 per cent of the total price fixation orders in 2002-03 has gone up to nearly 79 per cent this year, NPPA sources said.
Much to the unhappiness of the industry, the NPPA invoked its powers under Para 10(b) of DPCO to fix prices of 24 non-scheduled medicines during the year. As a result, 31 manufacturers have voluntarily reduced prices of 59 packs, apart from 24 packs for which prices were fixed by the agency.