Press Information Bureau

Government of India

Ministry of Chemicals and Fertilizers

20-December-2012 18:16 IST

National Pharmaceutical Pricing Authority (NPPA) has issued notices for overcharging as and when price violation cases have come to notice based on the reports received from State Drug Controllers or samples randomly purchased from market or complaints received from NGOs / individuals with requisite product details and photo copy of the carton / label of the product etc. The issue of preliminary notice does not mean that the company is liable to deposit the overcharged amount. The notices issued by NPPA for overcharging based on inputs received from different sources are vehemently opposed and contested by the pharmaceutical companies on several grounds, like, the composition of their product being different and no price has been fixed for their product or the ceiling price notified by NPPA is not as per the provisions of Drugs (Prices Control) Order, 1995 (DPCO, 95) or the SSI units are exempted from price control and not required to take approval of price from NPPA or the formulation has been manufactured before date of issue of the price notification etc. Each case requires thorough examination involving various technical issues to prove the contentions / arguments of the companies wrong and establish overcharging. The submissions made by the companies in response to the notices are critically examined. Sometimes personal hearings are also given to the companies on request. It is only after the overcharging is established; the “demand notice” is issued directing the company to deposit the overcharged amount including interest.

Since inception of NPPA in 1997 till October, 2012, there are 885 cases where demand has been raised and the details of those cases have been made available on NPPA’s website for general information of the public.

This information was given by the Minister of State for Chemicals and Fertilisers, Shri Srikant Kumar Jena in a written reply in the Lok Sabha today.

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NSK/DB

Price control notices: provisional overcharging allegations trigger scrutiny and, if confirmed, a demand for deposit of overcharged amounts. NPPA issues provisional notices for alleged pricing violations based on regulatory reports, market samples, or complaints accompanied by product evidence; these preliminary notices do not create an immediate payment obligation. Company submissions-which may assert differing composition, absence of a fixed ceiling price, SSI exemption, or pre notification manufacture-are critically examined and may be followed by personal hearings. Only after establishing overcharging does NPPA issue a demand notice directing deposit of the overcharged amount with interest, and NPPA publishes details of demand cases for public information.