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Only 7.84% of the overcharged amount is recovered from Drug manufacturers in the last 19 years

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As per the data available with the National Pharmaceutical Pricing Authority (NPPA), only 7.84% of the overcharged amount was recovered  from drug manufacturers in the last 19 years. More than 80% of the outstanding amount is under litigation.

As per the existing law, the National Pharmaceutical Pricing Authority (NPPA) is entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs. As per the latest available data with the NPPA, only 7.84% of the overcharged amount was realized in the last 19 years between August 1997 and April 2016.

What is NPPA?

The National Pharmaceutical Pricing Authority (NPPA) was established by the Government of India to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order (DPCO), 1995 and 2013. The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

Controlled Drugs & Prices

The NPPA fixes and revises the prices of various scheduled drugs based on the DPCO 2013. It publishes a compendium of prices every year. Consumers can also search for the price fixed by the NPPA for various scheduled drugs on the NPPA website. Drug manufacturers are not supposed to overcharge beyond the prescribed maximum prices. In such a case, the NPAA has the power to recover the overcharged amount from such manufacturers.

What can Consumers do?

The NPPA has launched the Pharma Jan Samadhan (PJS), on online system to lodge complaints in case of overcharging or shortage etc. Consumers can search for the MRP of scheduled drugs and then make a relevant complaint on the PJS. Consumers can lodge complaints in case of

  • Overpricing of Scheduled Medicine, new drug & drug for which price is fixed
  • Non-availability or shortage of any Medicine
  • Sale of New Medicine without prior price approval of NPPA
  • Refusal of Supply or Sale of Any Medicine

amount overcharged by drug manufacturers_pjs

Only 7.84% of the overcharged amount recovered in the last 19 years

As per data available with NPPA, a total of Rs 4929.3 crore was the overcharged amount between August 1997 and April 2016 (as per both DPCO 1995 & 2013) in 1427 cases. Out of this amount, only Rs 386.63 (7.84%) is recovered till date and the rest is outstanding.

amount overcharged by drug manufacturers_status of overcharged amount recovered

 Out of the total pending amount, more than 80% is under litigation in courts while for 17% amount, the cases are under process. The worrying aspect is that there are cases as far back as the late 90s that are still under litigation. Such delay does not prove as an effective deterrent for wrong doers.

amount overcharged by drug manufacturers_breakup of outstanding amount

 Many top companies have not submitted information on the IPDMS

 To obtain market-based data related to drugs, the NPPA has developed the Integrated Pharmaceutical Data Base Management System (IPDMS), aimed at facilitating on-line submission of mandatory returns/ reports by drug manufacturers. Despite repeated reminders, many top companies are yet to submit information on the IPDMS.

Featured image: By Ragesoss (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

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