Pharma cos can approach NPPA for redressing overcharging issueEven as the district collectors in several states have started executing recovery proceedings against several pharma companies for overcharging of various drug formulations, the National Pharmaceutical Pricing Authority (NPPA) has clarified that individual companies are welcome to approach the NPPA for redressing any grievances regarding the overcharging issue.

However, senior NPPA officials have made it clear that the NPPA would not entertain any representation in this connection from the industry associations for reviewing its notifications on overcharging as these decisions were taken after due deliberations by the NPPA. "The NPPA issues a notification after due deliberations and everything is taken into consideration before finalising a notification," a senior NPPA official said and added that "however, we will always entertain the individual companies to redress any grievances on this issue."

Some pharma companies in the country owe hundreds of crore of rupees dues to the NPPA on overcharging for the last several years. While the NPPA periodically slap notices to these companies to pay dues, the companies very often take the help of the court to stay further proceedings on the matter. The Indian pharma giant Cipla alone is to pay more than Rs 1000 crore to the NPPA, but the matter is pending in the court.

Recently, the NPPA has directed nine state governments to recover Rs110 crore from 30 pharma companies for overcharging of various drug formulations till January 2009. The list of companies includes drug majors like Wyeth, GSK and Dr Reddy's along with several small and medium companies. The companies started feeling the pinch when the district collectors served recovery notices to these companies asking them to pay up or else the government will be forced to start other recovery proceedings.

Since then, the industry associations have been crying hoarse that the pharma companies are not actually at fault and the overcharging dues have resulted only due to the wrong interpretation of notifications. The national drug regulator had some time back amended its internal guideline for price monitoring and enforcement to ensure that a larger number of overcharging cases automatically qualify for prosecution proceedings. As per the latest amendments in the price enforcement guidelines, the cases of charging more than the government-approved price would automatically be referred to district collectors for recovery as land revenue arrears if the overcharged sum is beyond a particular amount and the case has been pending for a long time.