NPPA seeks out-of-court settlements

The National Pharmaceutical Pricing Authority (NPPA) is seeking an out-of-court settlement of cases with pharmaceutical firms to enable faster resolution of pending litigation over overpriced drugs.

There were 746 instances of overcharging, according to the government body, and the litigation with companies is going on in different courts all over the country.

So far, NPPA is seeking penalties along with interest of Rs 2,150 crore from several firms, but has been able to recover just Rs 191 crore.

“We know it takes time to recover dues... as the battle in the court is a long process. We are now looking at out-of-court settlement with pharma companies as it would save time on recovering dues … we will not reduce the fine at any cost but may look at making the payments process easier. The objective of this exercise is to recover the dues as fast as possible,” NPPA chairman S M Jharwal told DNA.

Lupin, Merck, Dr Reddy’s, Cadila Healthcare, Cipla and Ranbaxy are among the over 100 firms that overcharged the regulated drugs or formulations and are in a legal tussle with NPPA.

Just two firms, Cipla and Ranbaxy, account for over 50 % of the total overcharged amount. According to NPPA, Cipla overcharged over Rs 1,300 crore and Ranbaxy overcharged Rs 136 crore.

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.