Drug overpricing: Govt plans amnesty scheme to recover dues from pharma companies

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In a bid to tackle overpricing in the pharmaceutical sector, the government is planning an amnesty scheme to recover dues from pharmaceutical companies, CNBC Aawaz reported.

The National Pharmaceutical Pricing Authority (NPPA), responsible for overseeing drug pricing, has identified a substantial 2,200 cases of overpricing within the pharmaceutical industry.

Among the companies under scrutiny for overpricing practices are well-known names such as Cipla, Sun Pharma, and Lupin. These cases collectively involve dues amounting to approximately Rs. 13,000 crore.

Also Read: Will rise in price caps of essential drugs expose chinks in price control policy?

The amnesty scheme proposes relief for pharmaceutical companies, offering waivers on interest and penalties associated with the alleged overpricing issues.

The primary objective of the amnesty scheme is to recover outstanding dues from these companies. It is estimated that the government aims to retrieve around Rs. 5,000 to 6,000 crore through this initiative.

How are drug prices regulated?

Periodically, the Health Ministry collaborates with experts to create the National List of Essential Medicines (NLEM). This list includes medications vital for treating prevalent conditions and falls under price control through the Drug Price Control Order (DPCO).

The NPPA, a part of the Indian Government, was established to regulate drug prices. It enforces pricing and availability of medicines as per the Drugs (Prices Control) Order, 1995. NPPA also recovers overcharged amounts from consumers and monitors prices of unregulated drugs to ensure affordability.