The Hindu Business Line : Cipla gets another Govt notice on overcharging

Mumbai, Nov. 14 Drug-maker Cipla has received a Government notice demanding Rs 24.23 crore, inclusive of interest for alleged overcharging by the company on antibiotic ciprofloxacin during the period April 2006 to March 2007.

This is the second such notice from the Centre this month. But it takes the total alleged overcharging amount on Cipla over the last five-odd years up to Rs 1,015.62 crore.

Cipla had received another similar notice from the Government earlier this month demanding Rs 49.47 crore, inclusive of interest for alleged overcharging during the same period on respiratory drug Salbutamol.

The company has however maintained that the Centre’s demand is contrary to orders of the Supreme Court and that Cipla has received legal advice that entire amounts demanded by the Government are not tenable and sustainable.

Past notices

In the past, Cipla has received notices from the National Pharmaceutical Pricing Authority demanding an estimated Rs 941.92 crore with interest, also for alleged overcharging by the company till March 2006 in respect of five drugs.

The drugs under the scanner for alleged over-charging are respiratory drugs Salbutamol and Theophylline; antibiotics, Ciprofloxacin and Norfloxacin; and cephalosporin-antibiotic Cefadroxil.

The overcharging allegations have dogged Cipla for over five years. Cipla had legally contested the Centre’s previous orders on overcharging saying, among other things, that the medicines in question were not under price-control.

It is a grey area and the medicines did not meet the criteria under which drugs are brought under price control, a company official told Business Line. The issue at present is at the Apex Court.