The National Pharmaceutical Pricing Authority (NPPA) has issued a set of internal guidelines for dealing with overcharging of medicines by pharma companies and cases involving without price approvals.
The guidelines are based on the recommendations of an expert committee constituted by the government to examine the issues relating to the practice followed in the NPPA based on the existing internal guidelines in regard to overcharging and WPA cases.
As per the recommendations of the committee, any scheduled formulation manufactured and sold by a company either at a price higher than the notified price or without price approval shall be liable for appropriate action as provided for in the DPCO '95. All price violation cases shall necessarily fall under 'Overcharging case' or 'WPA category' or both.
In cases where ceiling price notified under para 9 or specific price under para 8 of the DPCO, 1995 has been fixed by NPPA, the manufacturer has to follow the notified price or price order for such formulations which are comprehensively covered by virtue of the notes mentioned in the said notification.
In respect of formulations covered under the notification as stated above and the manufacturer is not following the said notified price on the plea that certain addition/deletion or any other change in the composition and/ or packing etc have been made, the case shall be primarily treated as a case of overcharging and the action shall be initiated for recovery of the overcharged amount along with interest.
In case of overcharging, the excess price i.e, the differential amount between MRP and Notified Price, charged by the manufacturer from the date of notification as applicable shall be recovered as overcharged amount together with interest.
In respect of all other cases where no price has been fixed or no price notification order similar/nearer to the formulation-in-question exists or where the manufacturer still disputes overcharging on any substantial ground, the cases shall be treated as WPA case. The company shall be informed that in that event, the case shall be treated as WPA and NPPA shall initiate action for recovery of the entire amount of sales realization from the date of introduction of such formulation till the price is fixed I notified as 'unauthorized sale', considering the fact that the concerned manufacturer has failed to take prior price approval under DPCO, 1995.
Even after notifying a separate price, if any manufacturer violates the price notification in the subsequent period, then the excess price charged by the manufacturer from the date of notification shall be recovered as overcharged amount with interest thereon.
For sale pertaining to the period prior to the fixing of a separate price or a ceiling price for the product, appropriate actions shall be initiated for recovery of the entire sale amount treating entire sale proceeds as 'unauthorised sales' against nil price for the period starting from the date of introduction of the product in the market till issue of the price notification order.
Where specific exemption has been granted to a SSI unit under SO 134(E) dated 02.03.1995 the benefit of such exemption shall be available only to those products which were in existence at the time of granting exemption by the Government or NPPA under the said notification. This shall be applicable to all overcharging/WPA cases irrespective of any annual turnover limit.