Lok Sabha Question No. 4981 (UNSTARRED), answered on 2019-07-23
Subject: Overcharging by Pharma Companies
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shrirang Appa Barne, Pritam Gopinath Munde, Girish Bhalchandra Bapat, Sangeeta Kumari Singh Deo, Shrikant Eknath Shinde

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA UNSTARRED QUESTION NO. 4981 TO BE ANSWERED ON 23 rd  July, 2019

## Overcharging by Pharma Companies

4981.  SHRI SRIRANGA APPA BARNE: DR. PRITAM GOPINATHRAO MUNDE: SHRI GIRISH BHALCHANDRA BAPAT: SHRIMATI SANGEETA KUMARI SINGH DEO: DR. SHRIKANT EKNATH SHINDE:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether many pharmaceutical companies are selling medicines to the consumers at arbitrary and higher prices than the fixed prices/Maximum Retail Price;
- (b) if  so, whether the Government proposes to recover the excess money charged by them along with penalty;
- (c) if  so, the details thereof alongwith the current status of the process of recovery including the penalty from the guilty companies;
- (d) the manner in which consumers would be compensated for the loss suffered;
- (e) whether the Government is considering to enforce printing of the production cost and profit  margin  on  pharma  products  to  check  arbitrary  profits  earned  by  the Pharma sector; and
- (f) if so, the details thereof and if not, the reasons therefor?

## ANSWER

## MINISTER IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI D. V. SADANANDA GOWDA)

(a), (b) & (c):  Instances have come to the notice of the National Pharmaceutical Pricing Authority  (NPPA)  wherein  some  pharmaceutical  companies  have  found  to  be  selling medicines to the consumers at a price more than that allowed under the provisions of the  Drugs  (Prices  Control)  Order,  2013  (DPCO).  The  NPPA  monitors  prices  of scheduled medicines (listed  in  the  schedule  of  the  DPCO)  as  well  as  non-scheduled formulations, on a regular basis to check overcharging by pharmaceutical companies. Whenever any pharmaceutical company is found to be charging a price of a scheduled formulation above its notified ceiling price or is found to have increased the Maximum Retail  Price  (MRP)  of  a  non-scheduled  medicine  more  than  ten  percent  of  its  MRP during preceding  twelve months,  action is taken  by the  NPPA  to  recover  the overcharged amount along with interest thereon from the concerned company as per the provisions of the DPCO and section 7A of the Essential Commodities Act, 1955.

Since  inception  of  the  NPPA  in  August,  1997  till  June,  2019,  2038  demand notices have been issued to pharmaceutical companies for overcharging patients on the sale of formulations at prices above the ceiling prices notified by the NPPA. Demand notices  have  been  issued  for  a  total  amount  of  Rs.  6370.20  crore,  out  of  which  Rs. 893.34  crore  have  so  far  been  recovered  from  the  pharmaceutical  companies.  An amount of Rs. 4032.55 crore is under litigation. The detailed list of overcharging cases where  demand  notices  have  been  issued  is  available  on  the  NPPA's  website www.nppaindia.nic.in.

(d): Presently there is no mechanism to compensate the consumers for the amount overcharged.

(e) & (f): No,  Sir.  The  National  Pharmaceuticals  Pricing  Policy,  2012  does  not provide for controlling of profits earned by pharmaceutical companies.

*******