Drug-price regulator, National Pharmaceutical Pricing Authority (NPPA) is set to chase drug majors for defaulting on penalties imposed for overcharging consumers. The defaulters include Cipla Healthcare, Lupin Limited, Dr. Reddy’s, Cadila and Baxter Pharmaceuticals among many others.
NPPA has issued a list of 1,018 cases, since its inception in 1997 up to March 2014, demanding Rs. 3,381 crore in penalties. So far it has recovered only Rs. 274 crore.
NPPA has now decided to look at bigger violations. “We have expedited the legal process to recover the overcharging penalty amounts. Companies that have to pay penalty of over Rs. 10 crore are our major focus now,” CP Singh, chairman, NPPA told HT. “Consumers get hurt when companies over-charge, which is why we are looking at the big price violations,” Singh added.
While some of the drug makers did not reply to mails sent by HT, most of the companies are not satisfied with the allegations and have filed cases against the authority in court. “In the past also we have won cases against the authority. This time also, based on legal advice, we haven’t paid the penalties in cases where the molecules used in the drugs were not the part of price control list,” said a Dr. Reddy’s Laboratories spokesperson.
Other companies echoed similar concerns. “Baxter has also challenged the demand and the order has been stayed and the matter is subjudice,” said the company.