NPPA recovers Rs. 980 crore from Pharma companies

NPPA had directed pharmaceutical companies to provide relevant data based on the updated provisional list of 324 overcharging cases

NPPA Price of drugs

Last Updated on February 5, 2021 by The Health Master

The National Pharmaceutical Pricing Authority (NPPA) has so far recovered Rs. 979 crore from pharma companies since its inception in 1997 till December 2020 based on cases of violations related to Drug Prices Control Order (DPCO)-1995 and DPCO-2013.

As of today, there still remains a total outstanding amount along with interest of Rs. 6,550 crore which the NPPA has to recover from 324 pharma companies as overcharged amount since 1995 which includes principal amount of Rs. 2,087 crore and Rs. 4,463 crores of interest.

NPPA had directed pharmaceutical companies to provide relevant data based on the updated provisional list of 324 overcharging cases under litigation related to DPCO-1979, 1987, 1995 and 2013 violations.    

As per the NPPA order issued, the companies have been directed based on the subject cited and to state that National Pharmaceutical Pricing Authority has taken up an exercise to update the database in respect of overcharging cases (OC) under litigation relating to DPCO -1979, 1987, 1995 and 2013. The data available in respect of such OC cases has been updated.

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NPPA order further stated, “It has been decided to upload the provisional list of OC cases under litigation on the website of NPPA so that companies involved may see the status of their case and if there is any discrepancy in the provisional list, the concerned companies may provide appropriate information or feedback.

Such feedback from the companies would help in timely updation and reconciliation of data.”

Feedback from companies, seeking any modifications in the provisional list, should be appropriately backed by supporting documents.

The interest amount in respect of cases included in the provisional list have been updated wherever possible upto November 30, 2020.

Any payment/part -payment made has been adjusted from overcharged amount while updating the interest, due to which in some cases the date of updation on interest may vary.

In case any modification, addition or deletion is required in the provisional list, the concerned company may provide relevant data within15 days on the publication of this list. The data provided by the company shall be examined by NPPA.

If found correct, required modifications, additions or deletions shall be done in the provisional list, the NPPA order stated.

Subsequently based on the industry demand to settle the pending 324 cases of overcharging under litigation in various courts, the Department of Pharmaceuticals (DoP) has also proposed draft framework of Special One-Time Settlement (SOTS) scheme to pharma companies for fast track recovery of liabilities relating to overcharging cases under Drugs Price Control Order (DPCO) 1979, 1987, 1995, 2013 in exercise of the powers conferred by the DPCO-2013 read with section 3 of the Essential Commodities (EC) Act, 1955, (10 of 1955).

SOTS-2021 shall be notified and introduced with effect from March 1, 2021 and shall close on June 30, 2021.

The SOTS, 2021 shall cover all active court cases in any Court of Law in the country, as on specified date, relating to overcharging under the provisions of DPCO 1979, 1987, 1995 and 2013.

The DoP proposes to bring the SOTS during the current financial year for the settlement of overcharging cases which are pending in various courts to provide a comprehensive platform for out of court resolution of disputes, promote ease of doing business in the consumer and industry interest.

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