The Hindu Business Line : NPPA recovers only 8% of over-charges on drugs

New Delhi, Nov. 6 The National Pharmaceutical Pricing Authority (NPPA), entrusted with the responsibility of recovering amounts overcharged by manufacturers for controlled drugs from the consumers, has been able to recover only 8.09 per cent (Rs 131.72 crore) out of the total overcharged amount of Rs 1,626.51 crore since its inception in August 1997, according to its own estimates.

A total of 74 bulk drugs and formulations made out of them come under the cost based price control mechanism of the NPPA.

Since its inception the NPPA has detected 585 cases of over charging involving an amount of Rs 1,626.51 crore. While in some cases it has been able to recover a portion of the money from the companies, claims for more than 90 per cent of the dues end up in the courts.

According to official sources, “generally small and medium companies pay up if found guilty but bigger players pull the issue to the courts.”

Recently, the Minister of State for Chemicals and Fertilisers, Mr B.K. Handique, in a reply in Parliament, had also pointed out that recoveries were poor due to orders from the High Courts and Supreme Court and in other cases in various other courts.

He had also pointed out the differences between the claimed amounts and actually recovered amounts in case of big companies like Ranbaxy and Dr Reddy’s among others.

Officials in the Department of Chemicals and Petrochemicals, the administrative ministry for the NPPA, said that companies in which the disputed amounts are substantially high include Ranbaxy with an estimated over-charge along with interest amounting to Rs 124.21 crore against which only Rs 27.81 crore has been recovered till October this year.

Similarly, in case of Dr Reddy’s Lab, NPPA’s estimated due stands at Rs 31.11 crore against a recovery of Rs 11.33 crore.

In the case of Lupin Ltd the recovery is nil against a due of Rs 68.53 lakh, officials pointed out.

Some of the common formulations in which several drug manufacturers were found to be over-charging include Ciprofloxacin based formulations, Cloxacillin based formulations, Norfloxacin based formulations, Cefaziline Sodium and Ethambutol, he said.

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