Tracking violations of Drug Price Control Order and recovering overcharged amounts from the pharmaceutical companies has been a daunting task for the National Pharmaceutical Pricing Authority ever since this body has been constituted by the ministry of chemicals & fertilizers. And overcharging of both scheduled and non scheduled drugs by the pharma companies continues to occur despite NPPA’s action against the offending companies. Its efforts to recover the overcharged amounts totalling over Rs.2577 crore so far by moving courts and approaching district collectors have not met with much success. The recovery process is still on. With 17 notices issued for overcharging in November last, the total number of notices issued by NPPA since its inception stands at 902.  The 17 notices, sent during November, were to six companies for recovery of an amount of Rs.16 lakh. All these are small companies. The NPPA, however, made some progress in recovering the overcharged amounts during November with recovery of  Rs.1.48 crore  taking the total recovered amount so far at Rs.233.99 crore. But the major defaulters such as Cipla, Cadila, Ranbaxy, Dr Reddy’s Lab, Pfizer, GlaxoSmithKline, Sun Pharma, Nicholas Piramal, IPCA Lab, and Merck with huge outstanding amounts continue to fight the recovery notices in various courts including in Supreme Court. As most of the cases pending in the courts, the NPPA had referred as many as 100 cases to the district collectors of different states for recovery under land and revenue arrears in the last couple of years. However, more than half of them are still pending with the collectors  and as many as 25 cases went again into litigation.  

The NPPA has been regulating prices of 74 drugs since 1995 and later it started monitoring prices of  non scheduled drugs as many of them remained outside the price control. Formulations of over 500 drugs are being marketed in the country by more than 7000 companies. NPPA's  task had become more challenging after it started  monitoring prices of non-scheduled formulations on a regular basis from 2007. Under the monitoring programme, if the price hikes of non scheduled formulations are found to exceed 10 per cent in a 12 months period, they are short listed for action. The manufacturers are then asked to furnish reasons for the price hikes and directed to bring down the prices if such hikes are found unreasonable. It is extremely difficult for NPPA to detect  growing number of violations all over the country considering it is a central body with limited number of staff. Currently NPPA  monitors the prices of non scheduled formulations through various methods like scrutiny of price lists submitted by manufacturers, analysis of monthly stockists secondary audit reports published by IMS-Health and complaints and references received from official and non- official sources. Now, with the new price control policy covering 348 drug formulations expected to be implemented shortly, NPPA will have a much bigger responsibility in regulating and monitoring drug prices. The possibility of circumvention and violation of the price control provisions is going to be much more then. This calls for an extensive price monitoring network all over the country. A proposal to set up price monitoring cells in state drug control administrations for tracking price violations  was put up to Planning Commission some years ago. It is high time the Centre started acting on this proposal if it is serious to enforce the new drug pricing policy.