Recovery Against Excess Prices on Medicines

National Pharmaceutical Pricing Authority (NPPA) since its inception in August 1997 till 31st July, 2011, based on detection of overcharging g cases, has issued demand notices in 812 cases involving an amount of Rs. 2357.24 crore (overcharging along with interest) for selling the medicines at a price higher than the prices fixed under Drugs (Prices Control) Order, 1995 (DPCO 1995).

Out of total amount of Rs. 2357.24 crore an amount of Rs. 211.25 crore has been realized till 31st July 2011. Out of remaining amount of Rs. 2145.99 crore, cases pertaining to an amount of Rs. 1936.14 crore are under litigation & are pending in various courts and Rs. 33.71 crore is pending for recovery with collectors of various States. Cases for Rs. 176.14 crore are being pursued with the concerned Pharma Companies.

A number of drug companies have been found to be selling medicines at a higher price to consumers. In such cases, NPPA initiates action of overcharging against the companies as per the provisions of the DPCO’1995 and the Essential Commodities Act, 1955. In order to ensure compliance of the notified ceiling price, NPPA calls for the control samples of the subsequent batches and the price list of the companies in respect of the formulations where the companies were found to have overcharged. NPPA also on continuous basis verifies the price lists submitted by the companies and undertakes market surveillance by suo-moto procurement of samples of scheduled formulation packs to see that there is no violation of the prices fixed and revised by NPPA.

This information was given by the Minister of State for Chemicals and Fertilisers, Shri Srikant Kumar Jena in a written reply in the Lok Sabha today.

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DNM/AS