National Pharmaceutical Pricing Authority (NPPA) will send recovery notices to all the companies involved in the seven-bulk drug overpricing case in the wake of the a favourable decision that has come from the Supreme Court on an Allahabad High Court order to stall the NPPA recovery move.

The NPPA will ask the companies to pay back the 50 per cent of the overcharged amount, and in case of non-compliance would inform the same to the Supreme Court, Vinal Bansal, chairman, NPPA informed pharmabiz.

According to the chairman, the NPPA would not be in a position to take coercive measures, but can issue notices to companies in the wake of the Supreme Court decision. The SC has given 3 weeks time to the companies and 2 weeks to the government to submit their affidavit. The SC is to resume the hearing after 5 weeks.

According to legal experts, the non-compliance on the part of the companies to remit the amount would account to contempt of court as the NPPA notice was based on SC directive to recover half of the overcharged amount.

It should be noted that after NPPA issued notices last year, Ranbaxy Laboratories Limited was the only company to deposit the amount in time. The Ranbaxy Ltd had later approached the Court to seek refund of the amount after it found that Cipla obtained a stay on the NPPA notice from Allahabad HC. By staying the HC verdict, Supreme Court has taken a major step to clear the entire issue without further delay.

The NPPA directive, which will not be valid, 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 was getting ready with the next set of notices to smaller players but had to stop the entire exercise after Cipla managed to get a stay order from the Allahabad High Court, after challenging the validity of some of the NPPA's price notifications.