NPPA strikes drug firms for raising MRP
24 May 2007
New Delhi: The National Pharmaceutical Pricing Authority (NPPA) plans to issue showcause notices to drug companies for increasing the maximum retail prices of 331 drug packs beyond the permissible limit.
The major drug companies likely to be hit with the notice include Dr Reddy''s, Emcure, Torrent and Cadilla. A large number (279) of the notices are of preliminary nature seeking explanation from the companies on the apparently abnormal price rise, 52 are of serious nature where the NPPA is not satisfied with the initial replies from the companies.
Usually, companies provide valid reasons for the price increase or they agree to reduce the prices to the permissible level (up to 10 per cent increase in a year). In the case of the 52 notices, the companies will either reduce the prices, or let the NPPA prescribe the maximum retail price.
The NPPA has so far issued notices to recover about Rs1,400 crore from drug companies for violation of the government-set prices.
While
the 52 notices are for medicines where prices underwent
a 20 per cent increase, the rest are mostly instances
where a 10 per cent and above price increase was seen.
The basis for calculation of price increase is the retail
stockist price data supplied by market research organisation
IMS-ORG.
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