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Drug makers granted more autonomy in calculation of penalty
Jan 20, 2014

According to the new drug price regime, the price regulators’ has started fixing prices of essential medicines. Over this issue top drug makers such as GlaxoSmithKline Pharma, Sun Pharma, Cipla and Alembic had approached various courts, including the Supreme Court last year. Some of them also opposed the method, mechanism and data used for capping the prices. However, in December 2013, the apex court in a ruling against GSK's appeal said the unsold medicine stocks from the previous batches cannot be sold at higher unrevised prices after the cut-off date fixed by the drug price regulator. These companies argued it was not feasible to replace or re-label older stocks with revised lower drug prices under the new pricing policy within the stipulated 45-day period.

Even as the Supreme Court had recently dismissed the industry's plea against prices fixed by the regulator and its timely implementation, the National Pharmaceutical Pricing Authority (NPPA) has asked companies to pay the overcharged dues with 15 per cent interest. It means, the companies have been left to calculate their own penalty.

Apart from NPPA, the pharmaceutical industry is also monitored by the Drugs Controller General of India (DCGI), whose mandate is to keep a check on the quality and availability of medicines. However, the DCGI's office is also struggling with similar challenges of human resource and infrastructure. Medicines manufactured and sold in the country are required to be approved by the DCGI. Besides, pharma companies are also required to take permission from the DCGI for conducting clinical trials or experiments in the country.


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