Gujarat Food and Drug Control Administration (FDCA) has referred around 350 cases of violation of Drug Price Control Order (DPCO) to National Pharmaceutical Pricing Authority (NPPA) till date. Violation of the ceiling prices of drugs under the controlled category is a violation of the new DPCO 2013 rules effective from July 2013.  

FDCA Commissioner Dr H G Koshia has sent a letter to the NPPA indicating that several companies in Gujarat and outside have been found violating the DPCO 2013 rules. Explains Dr Koshia, "Number of cases referred can increase in the new regime as we are consistently monitoring the practice of overpricing by small, medium and big manufacturers in the state.It is yet to be ascertained whether some manufacturers are doing it out of unawareness about DPCO rules or making a deliberate attempt to overcharge. It is violation of the law of the land in either of the cases. Gujarat FDCA had referred the maximum number of 600 cases out of 1000 such cases referred to NPPA in the previous DPCO regime of 1995. "

GlaxoSmithKline has recently payed Rs. 47.87 crore to National Pharmaceutical Pricing Authority (NPPA) towards overcharging Crocin Advance on May 21, 2014.

Contravention of any of the provisions of DPCO is punishable in accordance with the provision of the Essential Commodities Act, 1955. As per Sec. 7 of Essential Commodities Act, the penalty for contravention of DPCO is minimum imprisonment of 3 months, which may extend to seven years and the violator is also liable to a fine.

If a manufacturer sells a medicine at a price higher than the price approved or fixed for the product the manufacturer is liable for prosecution under Essential Commodities Act. He is also liable to deposit the amount with the Government accrued due to charging of prices higher than those fixed or notified by the Government.

Charging more than printed MRP of a medicine attracts the penal provisions of Drugs Price Control Order, 1995. The FDA/ Drugs Control Organisation of the State is the enforcing agency of Drugs and Cosmetics Act and DPCO at state level. Therefore, all complaints on prices as well as quality of medicines can be lodged with the Drugs Inspector of the District or the State Drug Controller. Complaints regarding violation of prices can be lodged with NPPA directly also.

The manufacturer of a non-scheduled drugs (drugs not under direct price control) is not required to take price approvals from NPPA for such drugs. However, NPPA is required to monitor the prices of such drugs and take corrective measures where warranted and their includes the power to fix and regulate such prices.

Prices of 652 formulations spanning over 27 therapeutic classes are regulated by DPCO 2013. Previous DPCO order regulated drug prices based on the manufacturing costs stated by their manufacturers. In the current order however ceiling prices would be calculated by taking simple average of all the drug brands having a market share of more than 1per cent. The final MRP of the drug would factor in 16 per cent to the retailer. This shifts the ceiling price calculation from a cost based to a market based method.