Even as Cipla continued to lead the tally of defaulters with more cases of overcharging being slapped on it, the drug firms by and large seem to be growing more price conscious by paying suo motto the difference between the permissible price and overcharged rates.
According to National Pharmaceutical Pricing Authority (NPPA) sources, a large number of drug manufacturers have in the past paid the overcharged amounts without waiting for the show cause notices being served on them.
“The companies are aware of the permissible hike in a calendar year on non-scheduled drugs. It is a welcome trend that the drug manufacturers are now coming forward on their own to pay the difference in the hike,” a senior official of the price regulating agency said.
Meanwhile, Cipla continued to be the major defaulter as per the latest figures released by the agency. The NPPA has issued notices in 816 cases till February 29, since its inception to claim a total amount of Rs.2456.90 crore. Cipla alone owed more than Rs.1674.42 crores.
The total recovery stood at Rs.217.67 crore till February 29. During the last three months period, the agency sent notices in nine cases to recover an amount of Rs.140.03 crores and the recovery during the period stood at Rs.0.9 crores, according to the figures.
Cipla, in its recent disclosure to the Securities and Exchange Board of India, had claimed that the cases were challenged in the court of law. “Company has now received further demand notices from the Government for Rs.424.64 crores towards interest upto January 2012, on the allegedly overcharged amounts in respect of the same drugs which are subject matter of litigation in the Hon’ble Supreme Court of India. These demands are contrary to the orders of the Hon'ble Supreme Court of India and the Company has received legal advice that entire amounts demanded by the Government are not tenable and sustainable,” its statement said.
According to the previous statement of arrears released by the agency, the total amount sought to be recovered from the companies on the grounds of crossing the permissible 10 percent increase of prices annually, the regulator sent 807 notices to recover a total of Rs.2316.87 crore as on November 30, 2011.
Apart from Cipla, most of the big companies in the sector also have figured in the list and many of them have paid the arrears in several cases. They included Cadila, Ranbaxy, Dr Reddy’s Lab, Pfizer, GlaxoSmithKline and Merck.