Drug companies fleeced patients of Rs 738 cr: NPPA

FE reports

Nearly 120 pharmaceuticals companies, including some of the largest operating in India, have “overcharged” patients to the extent of Rs 738 crore between 2003 and 2006, according to the National Pharmaceutical Pricing Authority (NPPA). But the companies -- including Ranbaxy Laboratories, Dr Reddy’s, Cipla, Glaxo, US Vitamins, and Johnson & Johnson -- have challenged the regulator in as many as 69 cases involving Rs 688 crore. The total number of cases is 395.

The amount of money involved in the remaining 326 cases stands at Rs 50 crore for which the process of recovery is on and NPPA has, so far, recovered Rs 19 crore. Drug companies, when contacted, said they would refrain from making comments as the matter is sub-judice.

Between January 2003 and December 31, 2006, NPPA sent notices to over 120 companies. Some of the drugs the companies are alleged to have overcharged on are: ciprofloxacin, norfloaxacin and salbutamol. Overcharging means selling at a price over and above the one set by the NPPA. The regulator sets drug prices based on the cost of production. For indigenously manufactured formulations, the maximum allowable post-manufacturing expenses (MAPE) are 100% of the cost of production. For imported formulations, it is up to 50% of landed cost.

This is filed under Ministers of Business Administration, but I don't know if it should be under SCFC.