Comments
Pharma companies will have to think twice before overcharging, as the National Pharmaceutical Pricing Authority (NPPA), which fixes prices of drugs and limited number of medical devices, is tightening the noose.
The NPPA, which has been struggling with violations of its ceiling prices, and in recovering the overcharged amounts from companies has now come out with internal guidelines to speed up the process.
The guidelines said, “In order to rationalise and expedite the monitoring, enforcement and recovery process in overcharging cases, and make it time-bound and more transparent in implementation, following guidelines shall be followed.”
The guidelines say the recovery process of the overcharged amount along with a 15 per cent interest will be completed within three months.
In the wake of limited market data, the NPPA has been struggling with violations of ceiling prices, with the companies routinely overcharging on these essential medicines, which include chemotherapy drugs, medicines to control heart conditions, kidney diseases, besides antibiotics and others.
Till now, because of lack of clarity in the process the NPPA has been able to recover less than eight per cent of the overcharged amount due. As of June this year, the Authority has been able to recover about ₹387 crore, against a total demand of over ₹4,950 crore. A massive ₹3,720 crore of the demand is stuck in various courts and litigation.
Under the Drug Price Control Order 2013, the Authority fixes the ceiling prices of more than 800 essential drug formulations. For other medicines, manufacturers are allowed to increase prices by 10 per cent annually.
Charging prices over and above these limits – those set by the NPPA for essential drugs and the annual 10 per cent increase for non-essential – are grounds for the NPPA to initiate action for recovery.
Legal action Upon non-payment of the recovery amount, even after show-cause notices, the Authority will take legal action against the company. The money collected will go to the Consolidated Fund of India. For the consumer it will be advantage in the long-term.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.