The Central Government has decided to dissolve the Drug Prices Liabilities Review Committee (DPLRC), the statutory body that reviews the entire matter relating to liabilities of drug companies arising on account of the implementation of provisions of the Drugs (Prices Control) Order, from December 31, 2005. The dissolution of the committee is known to be in tune with the government's plans to replace the committee with a settlement commission to handle all pending cases of overcharged scheduled drugs.

According to an official notification, the DPLRC is to be placed under 'suspended animation' with effect from December 31, 2005. The chairman and members of the committee have also been relieved of their duties from the above mentioned date.

As Pharmabiz had reported recently, the government is known to be in
favour of setting up a new settlement commission to succeed DPLRC. All the pending cases could then be transferred to the new commission. Over the years, the Department of Chemicals and Petrochemicals had referred 72 assessment cases to the DPLRC for its recommendations. The committee had furnished its recommendations in 50 cases for taking further, necessary action to recover the due amounts. In all the remaining cases, the concerned companies have either obtained individual interim stay orders from the High Courts or have claimed that their cases were covered by the Interim Stay Order dated 30.06.1997 of the Bombay High Court obtained by the Organisation of Pharmaceutical Producers of India (OPPI) and Indian Drugs Manufacturers' Association (IDMA) restraining the Department of Chemicals and Petrochemicals as well as DPLRC from issuing fresh notices to the companies with regard to DPEA liabilities under Drugs (Prices Control) Order, 1979. Out of these 50 cases, companies in 18 cases have moved various High Courts and obtained stay orders.

The government had recently informed the department related Parliamentary panel about 32 pending cases with the DPLRC. This included the 22 cases held up because of stays granted by the High Court of Mumbai involving a total amount of Rs. 142 crore. In addition, the panel was informed, that there are also 24 cases pending in the Supreme Court and in various High Courts involving approximately Rs. 101. crore. The Ministry had filed a transfer petition in the SC for transferring all the cases pending in various High Courts to the SC. While expressing concern over the extent of dues locked up, the committee wanted the matter be pursued vigorously for early realisation of the legitimate dues. The committee also sought early appraisal of the latest position including the details of the recovery and the extent of pending liabilities.

The DPLRC was constituted to assist in determining the liability of drug companies arising on account of the implementation of the provisions of the Drug (Price Control) Order, 1979. On the basis of the recommendations of the DPLRC, the Drug Prices Equalisation Account (DPEA) liability is determined by the Government and demand notices are issued to the drug companies.