Cipla, DRL, Ranbaxy overcharged consumers: Regulator

Pharmaceutical majors Cipla, Dr Reddy's Lab and Ranbaxy are under the surveillance of price regulator National Pharmaceutical Pricing Authority (NPPA). According to a Business Standard report, the price regulator has named some drug makers for allegedly overcharging consumers for many essential medicines, amounting to a total of Rs 2,362 crore over the past few years.

The report says that Cipla has overcharged consumers on several essential medicines such as formulations based on salbutamol, cloxacillin, ciprofloxacin and norfloxacin. Prices of all these medicines are fixed by NPPA and the regulator found the company selling these medicines at a higher retail price. An amount of over Rs 1,600 crore is pending against Cipla for allegedly overcharging consumers, the report quoted a government official.

While the alleged overcharging by Cipla spreads over around 10 years,  that by Dr Reddy's Labs and Ranbaxy spans across the last five-six years, according to the official.

Most of these companies have, however, challenged the claims made by the regulator in court, and therefore neither NPPA nor the government could take any action against them.

The report quotes the official saying that Cipla challenged the overcharging claims made by NPPA by contesting packaging and conversion cost norms framed by the regulator between 2001 and 2003. While fixing the prices, the regulator takes into account such costs as well. Some companies also reason that their composition is different and therefore the price fixed by the regulator does not apply on their drugs.