In a bid to act tough against the long standing defaulters in overcharging of drugs, the National Pharmaceutical Pricing Authority (NPPA) is reworking on the guidelines to attach the properties of erring drug makers.

After ordering attachment of properties of five companies in January to begin with, the price regulator is learnt to be modifying the existing guidelines to expand the scope of the action and crack the whip against more chronic defaulters.

The new guidelines are expected to be in place within a month so that action could be initiated against more firms. The agency is considering options including setting a cut-off date and fixing quantum of the arrears as the basis for invoking attachment provisions. It would also define the kind of attachment and follow-up actions to be taken in these cases.

Once the guidelines are set, the cases will be identified from the current lot of defaulters who have been sleeping on the demand notices for years. The NPPA had revised the guidelines to fix 10 per cent as the ceiling limit in permissible price hike of drugs per year from last financial year. However, more cases which may attract the action could be under the previous ceiling limit of 20 per cent.

Sources said that the NPPA was determined to pursue the pending cases, whether in litigation or out of court, through all possible ways with a view to recover the arrears. Attachment of properties is viewed as a better deterrent in this regard. NPPA had so far sent demand notices to the tune of Rs 1560 crore out of which Rs 1335 crore were held up in litigations. Besides actively pursuing the cases in the courts, the agency is keen to employ all possible tools to recover the remaining amount, sources said.

Meanwhile, the five cases in which attachment of properties was ordered under the provisions of Land Recovery Act are still under judicial process by the respective district magistrates. So far none of these companies have gone for court stay on the proceedings, it is learnt. Three of the companies belonged to Delhi and two are from Maharashtra. The total arrears due by these companies amounted to Rs 15 crore.