The Indian government has been able to recover just 7.83 percent of the total fine imposed on pharmaceutical companies for overcharging medicines. It recovered Rs. 386.07 crore out of the total fine of Rs. 4,928.09 crore that was slapped on drug firms.
"As on March 31, 2016, the National Pharmaceutical Pricing Authority (NPPA) has recovered Rs. 386.07 crore against total demanded amount of Rs. 4,928.09 crore, which is about 7.83 per cent," Hansraj Gangaram Ahir, the minister of state for chemicals and fertilizers, said in a written reply to the Lok Sabha on Tuesday, the Press Trust of India reported.
The pharma companies were found overcharging for the drugs whose prices have been fixed by the drug price regulator, NPPA. NPPA is mandated to fix the prices of controlled bulk drugs and formulation packs under the Drug (Price Control) Order, or DPCO, 2013. The Authority is also responsible for recovering the amounts overcharged by drug manufacturers for the controlled drugs.
The fine that the government is seeking from the pharma companies includes the overcharged amount as well as the interest since 1995.
The government is also embroiled in various legal battles with the drug firms over the overcharging issue across different courts of the country. The minister, while giving out the details of the unrecovered amount, said that the cases under litigation amount to Rs. 3,701.21 crore while the recovery cases pending with collectors stand at Rs. 72.26 crore. He also said cases amounting to Rs. 5.41 crore are under the review of the Board of Industrial and Financial Reconstruction /official liquidator.
The official liquidator is a central government-appointed body entrusted with the role of overseeing the affairs of a company under liquidation.
The minister was quoted by PTI as saying that in case the company does not deposit the demanded amount, the matter is referred to the concerned collector. "The cases referred to collectors are also followed up on a regular basis by issuing reminders," he added.
In Feb. 2016, NPPA warned of action against manufacturers for price violation, as it found the prices of over 4,700 medicines to be more than the permitted limits.