Govt claims recovery of Rs 73 crore for drug price violations in FY24

New Delhi: Union Minister of State for Chemicals and Fertilizers Anupriya Patel informed the Rajya Sabha on July 30 that the government has taken action against pharmaceutical companies for overcharging. The minister reported that Rs 72.73 crore was recovered from defaulting companies in 2023-24.

The recovered amount pertains to excess charges beyond the government-fixed prices for essential drugs. This sum also includes penalties for violations of the Drug Price Control Order (DPCO), which sets the maximum retail price for these drugs.

Despite this recovery, the amount is surprisingly small compared to the actual extent of DPCO violations in the domestic market. The current DPCO covers 384 drugs listed in the National List of Essential Medicines (India NLEM – 2022). These drugs are available in thousands of dosage forms and formulations, both branded and unbranded. The higher prices of branded drugs compared to unbranded ones highlight the lack of price standardisation in the market.

Each year, numerous pharmaceutical companies receive notices from the National Pharmaceutical Pricing Authority (NPPA) for DPCO violations. The amounts claimed in these notices often run into hundreds of crores, but many companies evade payment through legal challenges or other means.