NPPA FOR FRESH LEGAL BATTLE AGAINST OVERCHARGING DRUG FIRMS
Drug price watchdog National Pharmaceutical Pricing Authority
(NPPA) is gearing up for a fresh round of legal battle against
overcharging drug-makers, including the who's who of Indian
drug industry.
The period of 'no-coercive action' against allegedly overcharging
firms, stipulated by the Supreme Court, is ending next month.
The apex court is likely to hear a case against the government
and Mumbai-based Cipla at the end of the 'no-coercive action'
period.
Cipla allegedly owes the government around Rs 100 crore as
half the overcharged amount.
The Supreme Court had allowed the NPPA to recover the amount
allegedly overcharged by a number of firms including Ranbaxy,
Cipla, Wockhardt, Torrent and US Vitamins on medicines containing
seven active ingredients classified as controlled drugs.
Cipla obtained a stay from Allahabad High Court against the
recovery, following which, the government filed a special
leave petition with the apex court in July '04.
The September order worked only with Ranbaxy which paid Rs
23.5 crore as half of the overcharged amount on ciprofloxacin
from July 1997 to June '00. Sources told ET next month's hearing
would give an indication of how far the recovery proceedings
would progress.
NPPA has also sought a review of the interim stay on recovery
of overcharged amounts from Ranbaxy on norfloxacin and the
issue is pending in different high courts, they added.
NPPA has also filed an 'urgent petition' in Mumbai High Court
for a speedy disposal of the litigation over the prices of
seven active drug ingredients such as salbutamol, theopylline,
norfloxacin, ciprofloxacin, cloxacillin, doxycycline and glipizide.
NPPA's price notifications on these drugs were challenged
by the affected companies with the argument that they were
wrongly classified as controlled drugs.
The Bombay HC freed these drugs from control in '01, against
which the government secured an SC decision in August '03.
The apex court set aside the verdict and asked the HC to
determine the case afresh, while giving NPPA a free hand to
recover the overcharged amounts. Overall, the government has
recovered Rs 80 crore, compared to the total claim of over
Rs 593 crore in 246 cases.
In September, the SC allowed the government to recover half
the overcharged amount from these companies, but restrained
it from any coercive action.
