Cipla with Rs 1,382cr tops NPPA's overpricing list, Ranbaxy 2nd

Leading pharmaceutical firms such as Cipla, Ranbaxy, Pfizer, Dr Reddy's are among the firms pulled up by the drug price regulator National Pharmaceuticals Pricing Authority (NPPA) for overcharging.

According to the information available on the NPPA website, as on March 31, 2010, the total estimated overcharged amount, including interest, by various pharmaceutical firms since the inception of the NPPA in 1997 stood at a whopping Rs 2,150.38 crore. But so far, the Authority could recover a paltry Rs 191.45 crore from this and is fighting litigations in various courts to recover the rest of the sum.

According to the Authority, the country's top two firms Cipla and Ranbaxy, accounted for over 50 per cent of the total overcharged amount-- Rs 2,150.38 crore. While Cipla's overcharged amount stood at Rs 1,382 crore, that of Ranbaxy's it was at Rs 136.2 crore during the period.

Though the NPPA has been in litigation with Cipla over the issue it could not recover any amount from the Mumbai- based drugmaker, while the regulator has recovered around Rs 30 crore from the Delhi-based Ranbaxy.

The NPPA was established on August 29, 1997 as an independent body of experts with the task of fixing and
revising drug prices, both bulk drugs and formulations, to
ensure the availability.
 
Under the Drugs Prices Control Order of 1995, the NPPA is empowered to fix and regulate the prices of medicines produced by using 74 out of about 500 commonly used bulk drugs, kept under statutory price control. Under this provision, the Authority can prosecute any drugmaker found overcharging under the Essential Commodities Act and can recover the amount along with interest.