Skeptic News: Overcharging set to cost pharma companies full sales revenue of drug

From: Economic Times of India

A drug maker found overcharging will have to shell out the entire sales revenue of the medicine from the date of its launch as penalty, according to a directive issued by the country’s drug price regulator.

“If a company has not been booked for overcharging for selling the product without price approval, if any, pertaining to the period prior to fixation of the price of the said formulation, the entire sale amount from the date of introduction of the product till issue of the price notification order shall be recovered from the company, treating the entire sale proceeds as ‘unauthorised sales’,” the National Pharmaceutical Pricing Authority(NPPA) said.

The regulator said that action will also be taken in cases wherein the manufacturer and marketing company have failed to take prior price approval for sale of scheduled formulation packs. The NPPA has given state governments the authority to initiate legal action against companies found overcharging. While welcoming the move experts have raised apprehensions over the efficacy of the directive.

Recently, the NPPA charged 37 companies for overcharging. Dara Patel, secretary general of the Indian Drug Manufacturers Association, a lobby group of Indian pharma companies, said his association is yet to fully gauge the severity of the issue.

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