Expressing concern on the tardy progress in recovering dues by the National Pharmaceutical Pricing Authority (NPPA) from the defaulting companies on the grounds of overcharging, the Parliamentary Standing Committee for Chemicals Ministry has asked the price regulator to act tougher against the erring firms.

The NPPA should strictly monitor the prices of the non-scheduled formulations in order to check unwarranted increase in the prices of drugs. They should not hesitate to invoke the relevant provisions of the Drugs (Prices Control) Order, 1995 and fix the retail prices of such non-scheduled formulations, wherever required in public interest, the latest report from the panel said.

“The Committee have been informed that since its inception in August 1997, NPPA has detected 655 cases of overcharging and raised demands involving Rs 1,994.16 crore as on 31 March 2009. What has, however, caused concern to the Committee is that NPPA has been able to recover only an amount of Rs 156.04 crore against the total demand of Rs 1,994.16 crore and an amount of Rs 1,763.63 crore is under litigation and thus locked up in courts. The committee recommends that NPPA should vigorously pursue these cases and recover the dues promptly,” the report said.

According to the information furnished by the NPPA with the panel, the total number of cases also includes 76 cases where the demand has been contested by the company in courts of law and 14 cases referred to collector concerned for recovery but subsequently contested by the companies in courts of Law. NPPA is actively pursuing these cases, it was stated.

“If we notice any overcharging in respect of scheduled items, we take action. Then in so far as the non-scheduled items are concerned, where we do not have any powers for fixing the launch prices, there we monitor the price movement. From point to point, annually, we do not allow the price to go up by more than ten per cent. If the prices go up by more than 10 per cent, then we ask the companies to reduce the price and bring it within the ambit of 10 per cent. Most of time, they comply. If they do no comply, then we step in and we fix the prices of those medicines in the public interest under paragraph 10B of the DPCO. So far, 31 companies have voluntarily reduced on our intervention on prices of 60 packs and in 29 cases we had to step in prices. So there have been 89 cases so far which have been detected and we have taken action,” the NPPA chairman deposed before the panel.