Even as Gujarat Food and Drug Control Administration (FDCA) has referred new 350 cases of overcharging drugs to National Pharmaceutical Pricing Authority (NPPA), only Rs.4 crore have been recovered by NPPA. Around 300 small, medium and big manufacturers in the state have come under the scanner for overpricing pharma products in violation of DPCO 2013.
According to officials, commonly used antibiotics which have been notified as per the DPCO order have been overpriced. Gujarat FDCA had referred the 600 cases out of 1000 such cases referred to NPPA in the previous DPCO regime of 1995.
Violation of the ceiling prices of drugs under the controlled category is a violation of the new DPCO 2013 rules effective from July 2013. Regulatory officials, however, feel that cases of overcharging will happen in the near future as NPPA capping of the prices recently of 108 formulation packs of 50 antibiotic, cardiovascular, diabetes and malaria medicines could adversely hit profit margins of several MNC and domestic drug firms.
FDCA Commissioner Dr H G Koshia had also recently sent a letter recently to the NPPA indicating that several companies in Gujarat and outside have been found violating the DPCO 2013 rules. Explains Dr Koshia, "Number of cases referred can increase in the near future under the new pricing regime as we are consistently monitoring the practice of overpricing by small, medium and big manufacturers in the state. It is yet to be ascertained as to what is the quantum of overpricing and its time of recovery as both local and MNCs are a part of this menace. NPPA has to contact the concerned drug regulators in respective states involved in overcharging and get the required details from the local and MNC pharma companies which might take time."
GlaxoSmithKline has recently payed Rs.47.87 crore to National Pharmaceutical Pricing Authority (NPPA) towards overcharging Crocin Advance on May 21, 2014 based on Maharashtra FDAs crackdown on overpriced paracetamol brands.
Contravention of any of the provisions of DPCO is punishable in accordance with the provision of the Essential Commodities Act, 1955. As per Sec. 7 of Essential Commodities Act, the penalty for contravention of DPCO is minimum imprisonment of 3 months, which may extend to seven years and the violator is also liable to a fine.
The FDA or Drugs Control Organisation of the State is the enforcing agency of Drugs and Cosmetics Act and DPCO at state level. Therefore, all complaints on prices as well as quality of medicines can be lodged with the Drugs Inspector of the District or the State Drug Controller. Complaints regarding violation of prices can be lodged with NPPA directly also.
Prices of 652 formulations spanning over 27 therapeutic classes are regulated by DPCO 2013. Previous DPCO order regulated drug prices based on the manufacturing costs stated by their manufacturers. In the current order however ceiling prices would be calculated by taking simple average of all the drug brands having a market share of more than 1per cent. The final MRP of the drug would factor in 16 per cent to the retailer. This shifts the ceiling price calculation from a cost based to a market based method.