MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS AND PROGRAMME
IMPLEMENTATION AND MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI
SRIKANT KUMAR JENA)
(a) & (b): The `life saving drugs` are not defined in Drugs (Prices Control) Order, 1995
(DPCO, 95). National Pharmaceuticals Pricing Authority (NPPA) has issued notices for
overcharging as and when price violation cases have come to notice. The allegations received
that notice for overcharging has not been issued in many cases, however, were not backed by
requisite pr6duct information and supporting documents and hence, not found sufficient
evidence to initiate action relying upon those allegations.
(c) The issue of preliminary notice does not mean that the company is liable to deposit the
overcharged amount. The notices issued by NPPA for overcharging based on inputs received
from different sources are vehemently opposed and contested by the pharmaceutical companies
on several grounds, like, the composition of their product is different and no price has
been fixed for their product or the ceiling price notified by NPPA is not as per the
provisions of DPCO, 1995 or the SSI unjts are exempted from price control and not required
to take approval of price from NPPA or the formulation has been manufactured before date
of issue of the price notification etc. Each such case requires -thorough examination
involving various technical issues to test the contentions / arguments of the companies
wrong and establish overcharging. It is only after the overcharging is established; the
demand notice is issued directing the company to deposit the overcharged amount including
interest to the Government. About 95% of the total amount demanded from companies for
overcharging is under litigation in various High Courts and the Supreme Court
(d) During the last 3 years, viz., 2009, 2010 and 2011 there are about 700 cases
where preliminary notices have been issued. Year wise detailed information as asked
for in the question is not readily available.
(e) The instances of overcharging in the prices of Ciplox & Ciplox TZ Tabs
manufactured by M/s Cipla Ltd. have come to notice of NPPA and appropriate action
has been taken for recovery of overcharged amount for the relevant period by issuing
Demand Notices. The Hon`ble High Court of Allahabad in its order dated 4.03.2004 in
W.P. no. 41214/2003 quashed various price notifications issued for Ciprofloxacin based
formulation. The Hon`ble Supreme Court in SLP (CA 329/2005 filed by Union of India vs
M/s Cipla Ltd.) while staying the operation of the said order on 14.03.2005, directed
NPPA not to take any coercive action or launch prosecution for recovery of amounts
against respondent i.e. M/s Cipla Ltd. The aforesaid SLP is pending for final hearing in
the Hon`ble Supreme Court of India. As regards Nutrolin B Plus Caps and Pedtabs,
Show Cause Notice has been issued to the company quantifying the overcharging
liability based on ORG-IMS data.
