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Number of overcharging cases and demand raised by NPPA declines in 2023-24
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Gireesh Babu, New Delhi
July 22 , 2024
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The number of cases booked and amount demanded by the National Pharmaceutical Pricing Authority (NPPA) for alleged overcharging of drug prices by the pharma companies has seen a decline in the year 2023-24, as compared to the previous year. The total amount realised during the year has seen a significant increase as against the previous years.
The number of cases initiated by NPPA against price regulation violations has declined to 95 in 2023-24, as compared to 148 in the previous fiscal year. The overcharged amount demanded including interest, during the year was a meagre Rs. 46.33 crore as compared to Rs. 141.81 crore demand with interest, in the previous fiscal year, according to data from the NPPA.
However, the total amount realised during the year has seen a significant jump to Rs. 72.73 crore, which is a four-year high (starting from 2020-21), as compared to a meagre Rs. 5.10 crore in the previous fiscal year.
The amount realised against the demand raised during the particular year of 2023-24 stood at Rs. 12.52 crore as against the demand raised of Rs. 46.33 crore (including interest) during the fiscal, while the rest of Rs. 33.81 crore is outstanding. The amount realised in the year 2022-23 was Rs. 11.75 crore, as against the demand of Rs. 141.81 crore (which includes interest) during the fiscal, while Rs. 130.06 crore is still outstanding.
Almost 86 per cent of the total demand raised by the National Pharmaceutical Pricing Authority, including interest from the pharma industry on alleged overcharging of prices over the years, is outstanding till the end of 2023-24, shows the data.
The overcharged amount including interest whenever updated, demanded by the Authority till the end of March, 2024, is Rs. 9974.5 crore, out of which Rs. 8576.3 crore is yet to be realised.
As per the data available, till March, 2024, the drug price watchdog has reported a total of 2,499 cases of overcharging from the year 1979. It has raised demand for overcharging to the tune of Rs. 9,974.5 crore, including interest whenever updated, till end of March, 2024.
Out of the demand, around Rs. 1,398.3 crore has been realised till March, 2024, leaving around Rs. 8,576.3 crore, which is around 86 per cent of the total amount, as amount yet to be recovered.
The Authority is in litigation with the companies on various forums including cases referred to collector and contested by the companies in the court of law and the total amount under such litigations is a total of Rs. 6,161 crore, which is around 71 per cent of the total of Rs. 8,576.3 crore outstanding out of the demand raised.
Of the rest of the amount demanded and outstanding, cases to an amount of around Rs. 226.1 crore are referred to the collector and the amount is still to be recovered, while recovery of around Rs. 5.5 crore is pending in connection to the industrial and financial restructuring and official liquidator. The rest of Rs. 2,183.7 crore is related to the overcharging cases under process, added the Authority.
It said that the suo-moto recovery for the six month period from October 1, 2023 to March 31, 2024 was a meagre Rs. 0.95 crore in Drugs Prices Control Order (DPCO), 2013, as compared to Rs. 2.54 crore in DPCO, 2013 and Rs. 0.19 crore in DPCO, 995 in the previous six months from April 1 to September 30, 2023.
The Authority has realised a total of Rs. 72.73 crore during 2023-24, while it was just Rs. 5.10 crore during the entire 2022-23 period, Rs. 10.72 crore in 2021-22, and Rs. 24.10 crore in 2020-21. The total amount released by the authority from the total outstanding demand for the year 2019-20 was Rs. 85.10 crore.
It may be noted that the Department of Pharmaceuticals, in its year end review in December, 2023, said that the government is effectively monitoring the prices of scheduled as well as non-scheduled medicines under DPCO, 2013 and takes action against companies found overcharging the consumers based on the references received from the State Drugs Controllers; individuals; samples purchased from the open market; reports from market based data; and complaints reported through the grievance redressal websites, ‘Pharma Jan Samadhan’ and ‘Centralized Public Grievance Redress and Monitoring System (CPGRAMS)’.
During the year 2023, the centre has collected 1,310 samples and 603 cases were found prima facie price violation, it said.
The Pharma Sahi Daam App 2.0 available on Android as well as iOS platform has features like searching of prices for medicines (brand wise or formulation wise), search latest ceiling prices of scheduled drugs, etc. Users can compare the prices of different brands of the same formulation; and share price details on messages etc. The app or search medicine facility tool facilitates consumers to verify whether medicines are being sold within the approved price range and also to detect any case of overpricing by pharmaceutical companies/chemists.
Users can also register a complaint or view the status of the complaint, which was raised earlier (OTP authentication). If there is any ceiling price violation, the buyer will be able to lodge a complaint against the company/ chemist through Pharma Jan Samadhan/Pharma Sahi Daam, it added. There were over one lakh downloads of the App, said the Department.
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