Drug major Cipla on Friday said it has received demand notices for Rs 424.64 crore from the National Pharmaceutical Pricing Authority (NPPA) towards interest for alleged drug overpricing.
The firm that is currently fighting a case at the Supreme Court against the government, claimed the demand is not tenable and sustainable.
“The company has now received further demand notices from the government for Rs 424.64 crore towards interest up to January 2012,” Cipla said in a filing to BSE.
The interest is on the allegedly overcharged amounts in respect of the same drugs which are subject matter of litigation in the Hon’ble Supreme Court of India, it added.
The company had stated in an earlier filing that it had received demand notice of Rs 1,230.28 crore (inclusive of interest) from the government for the period July 1995 to April 2009.
“These demands are contrary to the orders of the Hon’ble Supreme Court of India and the company has received legal advice that entire amounts demanded by the government are not tenable and sustainable,” Cipla said.
Though the NPPA has been in litigation with Cipla over the issue, it has not been able to recover any amount from the Mumbai-based drugmaker.
Under the Drugs Prices Control Order of 1995, NPPA is empowered to fix and regulate the prices of medicines kept under statutory price control.
The organisation is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.
Shares of Cipla today closed at Rs 315.60 on BSE, up 0.05 per cent from its previous close.