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s. 3,501 crore settlement offered to drug firms by the Government for price cap penalties

The government of Indian has offered one-time waiver of the interest if Drug makers, which includes Sun Pharmaceuticals Industries Ltd, Pfizer Ltd and Lupin Ltd, agree to deposit more than Rs. 3,501 crore, which they collected by selling drugs at a price higher than prescribed by drug pricing regulator.

The department of pharmaceuticals has also offered to waive interest which is amounting to more than Rs. 1,325 crore out of the total outstanding amount of Rs. 4,827 crore only on one condition, if it drops down lawsuits challenging the departments’ order.

There are around 666 cases in which the department has asked drug makers to disgorge excess profits because of non-compliance with government orders since 1997.

The National Pharmaceutical Pricing Authority (NPPA) sends a notification to drug makers determining recovery of the overcharged amount, punishments, a charge of 15% interest and prosecution measures, as indicated by the Essential Commodities Act. A significant number of these questions are, however, tied up in the case.

To settle such debates, DoP has composed letters dated 13 March and 2 April to pharma groups including Indian Pharmaceutical Alliance (IPA) and Indian Drug Manufacturers’ Association (IDMA), offering to forgo interest charges.

IDMA, in a letter dated 22 April to DoP, has mentioned about the discrepancy. “The liabilities displayed on the website against various companies suffer from discrepancies. Method of computing the accrued amount, period, quantities are taken into consideration, etc appear to be inaccurate in several instances,” says the letter.

As indicated by information accessible on the website of NPPA, India’s pricing authority has not made much progress in recovering outstanding dues from the companies for overcharging.

Public health activists state the settlement offer is intended to give the organizations a chance to off with a rap on the knuckles. Malini Aisola, co-convener of All India Drug Action Network named DoP’s offer unlawful.

Pharma lobby groups IDMA and IPA asked DoP to resolve the issue, In April 2015 and June 2018. Emails that were sent to Sun Pharmaceuticals, Pfizer, Lupin, Cipla Ltd, Sanofi India Ltd and Glenmark Pharmaceuticals did not draw out any response till the time of going to press.

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