Lok Sabha Question No. 3770 (UNSTARRED), answered on 2016-08-09
Subject: Price of Medicine
Ministry: CHEMICALS AND FERTILIZERS
Asked by: HEMANT TUKARAM GODSE

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

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## LOK SABHA

## UNSTARRED QUESTION NO. 3770

TO BE ANSWERED ON 09 th  August, 2016

## Price of Medicine

## 3770.  SHRI GODSE HEMANT TUKARAM:

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

- (a) whether many pharmaceutical companies have sold medicines to the consumers at higher prices than the fixed prices/Maximum Retail price;
- (b) if so, the names of such companies and the time since when such companies have been overcharging along with the action taken thereon, company-wise;
- (c) whether the Government proposes to recover the excess money charged by them along with penalty;
- (d) if  so,  the  details  thereof  and the present status of the process of recovery including the penalty from the guilty companies along with 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 OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS;  MINISTRY  OF  SHIPPING  AND  MINISTRY  OF  CHEMICALS  AND FERTILIZERS (SHRI MANSUKH L. MANDAVIYA)

## (a): Yes Madam,

- (b) to (d): Action for recovery of the overcharged amount is taken as per the provisions of Drugs  (Prices  Control)  Order,  1995  (DPCO,  1995)  and  Drugs  (Prices  Control)  Order,  2013

(DPCO, 2013). Whenever companies are found overcharging the consumers in respect of price of medicines, demand notices are issued for recovery of overcharged amount alongwith interest thereon  for  violation  under  various  provisions  of  DPCO,  1995  and  DPCO,  2013  read  with Section 7A of Essential Commodities Act, 1955.

Since  inception  of  National  Pharmaceutical  Pricing  Authority  (NPPA)  in  1997,  1445 demand notices (as on 30.06.2016) have been issued to pharmaceutical  companies for having overcharged consumers on the sale of scheduled & non scheduled medicines (1279 cases under DPCO 1995 & 166 cases under DPCO 2013). These demand notices relate to a total amount of Rs.4953.46 crore. (amount inclusive of principal overcharged amount and interest thereon). Out of the total amount demanded so far, an amount of Rs.386.91 crore has been deposited by the companies to Government. An amount of Rs.3720.38 crore is under litigation. The detailed list of  overcharging  cases  where  demand  notices  have  been  issued,  has  been  uploaded  on  NPPA website (www.nppa.nic.in).

However, in some cases, the demands raised for overcharging have been challenged in Courts. Hon'ble Supreme Court in Civil Appeal No.329/2005 in UOI & others vs. M/s Cipla Ltd. & others vide order dated 20.07.2016 directed the companies to deposit 50% of the overcharged amount  within 6 weeks, failing which coercive action can be taken against the companies.

Wherever  the  demand  raised  by  NPPA  has  not  been  challenged  in  the  court  and  the concerned  company  has  not  deposited  the  demanded  amount,  the  matter  is  referred  to  the respective District Collector for recovery of the overcharged amount as arrears of land revenue under  Essential  Commodities  Act,  1955.  The  cases  referred  to  District  Collectors  are  also followed up on regular basis.

Presently, there is no  mechanism  to  compensate  the  consumers  for  the  amount overcharged.

(e) & (f): There is no such proposal in the Department.

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