PPA's attempts to recover overcharged amounts through district collectors

New Delhi, 22 Nov: The recovery of arrears by the National Pharmaceutical Pricing Authority (NPPA) from the overcharging pharma companies continued to be very slow, even after pursuing the matter through district collectors, thanks to the long-pending cases in the cases. As per the latest records by the agency, notices were sent in 885 cases of overcharging till October 31 this year, for a total amount of Rs.2577.28 crore while the recovered amount stood at just Rs.232.51 crore so far. Sources said the agency resorted to referring the cases to the concerned district magistrates in a bid to speed up the process and force the companies to pay the arrears. However, even such move was virtually nullified by the companies by going to the court. Around 100 cases had been referred to the collectors of various states for recovery under land and revenue arrears in the last couple of years. However, more than half of them are still pending with the collectors despite the efforts by the agency. As many as 25 cases went again into litigation. The agency could collect the arrears only in a handful of cases after referring to the district magistrates, it is learnt. “The recovery of the overcharged amount is affected due to various Court orders passed by various High Court and also Supreme Court in various cases filed by pharmaceuticals companies challenging the price fixation/notification issued by the NPPA. Inclusion of some bulk drugs under price control (scheduled-I of DPCO’95) has also been challenged by the pharma companies in different courts of India,” an official said. “The NPPA is defending such cases through SG, ASG’s and senior government Counsels. Whenever necessary, the agency files urgent application in the Courts for vacation of interim orders and also for early hearing/disposal of the case,” he said. According to the latest figures released, the agency sent notices in 14 fresh cases during the month of October alone, seeking to recover a total of Rs.3 crore. As far as the default list is concerned, Cipla which has gone to court in almost all cases, continues to be the leader of the pack, accounting for more than half of the total arrears due from the entire pharmaceutical industry. Apart from Cipla, most of the big companies in the sector also have figured in the list and many of them have paid the arrears in several cases. They included Cadila, Ranbaxy, Dr Reddy’s Lab, Pfizer, GlaxoSmithKline and Merck.

Pharmabiz