Drug firms demand NPPA withdraw notices alleging overcharging
New Delhi: The Indian Pharmaceutical Alliance (IPA), a lobby group representing local drug makers, has written to the department of pharmaceuticals criticizing the drug pricing regulator for issuing demand notices to top drug makers over “suspected overcharging”.
The industry body has asked the department to intervene and direct the National Pharmaceuticals Pricing Authority (NPPA) to withdraw the notices. The matter pertains to demand notices issued by the NPPA, which comes under the pharma department, to several members of IPA for allegedly “overcharging” after the issuance of price notification in July 2014.
The NPPA had according to a notification issued on 10 July 2014 extended price control to non-scheduled products under para 19 of the Drug Price Control Order (DPCO), 2013. According to DPCO, the NPPA may “in extraordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any drug for such period as it deems fit”.
After the expiry of the stipulated period, during which the manufacturer is at liberty to sell the formulations at the maximum retail price prevailing prior to the NPPA’s notification, IPA has alleged that the regulator is “demanding overcharges” beyond the relevant period.
“The NPPA has started sending notices for recovery of allegedly overcharged amount calculating it from 2014 to the current date whereas the overcharging should be limited to 10 September 2014 to 9 September 2015 alone. This is unfair and asking for recovery of alleged overcharging is contrary to the law,” said D.G. Shah, secretary general, IPA.
According to IPA, the NPPA’s demand notices on alleged overcharging are based on an “erroneous” and complete “misunderstanding and misinterpretation” of DPCO, said the copy of the letter reviewed by Mint. “NPPA appears to be under the misapprehension that they are entitled to decide at what price and from what date the increase of 10% should be permitted. However the DPCO does not give any such discretionary power to NPPA,” the letter further said.
NPPA chairman Bhupendra Singh declined to comment. “I cannot comment without seeing the referred documents. Also I don’t see here any cause of action to comment,” he replied to an email sent by Mint.