Cipla, Others to Cough up Big Monies in Drug Overpricing Case
Drug companies face Supreme Court heat; will have to pay 50% of total demand of the pharma regulator for overcharging from consumers.
Pharmaceutical companies, including Cipla Ltd., will have to pay 50 percent of the money ‘overcharged’ for medicines from consumers, according to a recent Supreme Court ruling.
In a filing on the Bombay Stock Exchange, Cipla today said it will be required to pay Rs 175.07 crore to the government within six weeks. That’s 50 percent of the total demand raised by India’s pharma regulator.
National Pharmaceutical Pricing Authority (NPPA) sent several demand notices to the companies for allegedly charging more from consumers for their medicines. Outstanding dues stood at over Rs 4,500 crores till February 2016, data on the drug pricing watchdog’s website shows.
Most leading pharmaceutical companies disputed the NPPA demand notices and took the matter to court.
Reiterating its 2003 order, the apex court on July 20, directed companies to deposit 50 percent of total amount overcharged, as mentioned in the demand notices sent by the NPPA. The Supreme Court also lifted its earlier order that restrained the Bombay High Court from hearing the issue and asked the high court to give its final verdict expeditiously.
These matters, which have been pending since 1997, will once again be heard by the Bombay High Court in the coming days.
“The writ petitions (by drug companies) will be taken up for consideration only after compliance of this order is reported to the concerned High Court,” added the apex court’s order. The court has further allowed the Centre to take action against drug companies for non-compliance of the order.
Apart from Cipla, companies affected by the Supreme Court order include Ranbaxy, Merck, Sun Pharma, Glenmark, Cadila, Glaxo India etc.