National Pharmaceutical Pricing Authority (NPPA) is contemplating stringent measures against the pharmaceutical companies who failed to comply with its directives to remit the overcharged amounts on the price-controlled drugs. The NPPA, in consultation with the Ministry of Chemicals and Fertilizers, may issue orders to attach the assets of companies as part of the recovery process.

Informed sources said that tough posture of NPPA has become inevitable after the erring companies, against whom notices were served as per the directives of the Supreme Court, failed to respond within the stipulated time. Though the Apex Court had given one month’s time to the parties concerned to pay half the amount on overcharged on formulations of seven bulk drugs. But, barring Ranbaxy Laboratories Limited, no other company has deposited the amount with NPPA.

The NPPA had since then sought an explanation from the companies for the failure. The sources said that as the next step, the authority will be adopting tough measures aimed at recovering the amount through legal steps.

The NPPA directive was based on the SC verdict on the civil appeal no 3375-3384/2002 filed by the Ministry of Chemicals and Fertilizers seeking a review of an HC Order that excluded all seven bulk drugs from the price control list. The SC had asked NPPA to recover 50 per cent of the over charged amounts from the companies involved. The companies which received the NPPA notices with regard to the overcharging of Ciprofloxacin, Norfloxacin, Doxycycline, Salbutamol, Theophylline, Cloxacillin and Glipizide were Cipla Ltd, Ranbaxy Laboratories, Okasa Pharma Ltd, Unichem Laboratories and USV Ltd.

NPPA is also known to be getting ready with the next set of notices to other companies who were overcharging for these medicines from the consumer.

Cipla, the company which was asked to pay about Rs 50 crore as part payment, has approached the Allahabad High Court, challenging the validity of some of the NPPA’s price notifications that relates to these drugs.

When contacted, various drug industry associations informed that none of these companies have approached the associations for any help. According to the representatives of the associations, “the matter cannot be generalised and the erring companies will have to pay the cost for it”. NPPA officials were tight-lipped over the next move of the authority and informed that the authority will take appropriate decision within a week.