pharma companies to face legal action

NEW DELHI: The drug price regulator has asked state governments to initiate prosecution proceedings against five pharmaceutical companies for allegedly selling select brands without getting their prices approved by the regulator. The companies, which would face legal action for allegedly selling 39 specified pack sizes of different medicines without getting prior price approvals, are Alembic, Cadilla Healthcare, Wockhardt, Lupin and Medley Pharmaceuticals. While the largest number of cases are registered against Cadilla Healthcare for flouting prices in about 30 products, Wockhardt and Lupin face regulatory action for one case each. The National Pharmaceutical Pricing Authority (NPPA) has asked Cadilla Healthcare to pay the amount it allegedly overcharged from consumers in case of about 25 other products as well. The regulator is also examining close to 30 other cases of overcharging, where companies may be asked to pay back the excess amount collected from consumers. In case of non-compliance, those companies may also face prosecution proceedings.
NPPA’s tough action comes days ahead of a crucial meeting of ministers on April 30 to finalise how drug prices should be controlled in future. The government’s response to alleged price violations indicate that the existing norms are sufficient to keep a close eye on price movements and intervention when required, without further tightening the policy. The policy that the ministers would review, seeks to extend the coverage of price control to all essential medicines while at the same time, softening the intensity of control to a level. The new policy also seeks to introduce monetary penalty in certain cases instead of time-consuming prosecution. NPPA initiated the regulatory offensive after it discovered prima facie violations in a list of about 900 drugs, on which drug makers offered to lower prices voluntarily in return for a softer pricing policy. The government, in the meanwhile, conducted a survey to see if companies honoured their promise. It has noticed that in states such as Tamil Nadu and Karnataka, these drugs were not available at the promised price. However, about half of them were available in Delhi at the price that was promised. This result forced the ministry of chemicals and fertilisers to go ahead with the proposed new policy.
23 Apr, 2008, 0229 hrs IST,Gireesh Chandra Prasad, TNN
THE ECONOMIC TIMES