Instant Report

Date: 28-Jul-2021

Top Companies Fighting NPPA On Alleged Overcharging Cases Include Cipla, Sun Pharma And Torrent Pharma

Even as the country’s drug price regulator, the National Pharmaceutical Pricing Authority (NPPA), is bracing itself up to recover around Rs. 8,098 crore from pharmaceutical industry on account of alleged overcharging along with interest, the highest number of litigations are fought by some of the major pharmaceutical companies in the country.

According to the data released by the NPPA, the highest number of litigations out of the 334 cases are being fought by Cipla Ltd, Sun Pharmaceuticals, Torrent Pharmaceuticals Ltd, to name only a few.

An email sent to Cipla seeking its comments on the litigation and the charges made by the NPPA did not elicit response till the time of going to the press.

Data shows that around 35 litigations are going on between Cipla Ltd and NPPA, for a principal overcharged amount of over Rs. 1,194 crore, for which the authority imposed an overcharged amount along with interest of around Rs. 3,641.9 crore. Of this, in almost five cases, Cipla along with its partner firm are parties. Unlike with the other two companies, only in four out of the 35 cases, NPPA was able to make a partial recovery. A total of Rs. 179.9 crore was recovered from these four cases, while the rest of around Rs. 3,462.06 crore is outstanding.

Sun Pharma is engaged in 28 litigations with NPPA, in which it has partially paid the amount in almost all the cases. The authority has claimed a principal overcharged amount of Rs. 222.07 crore from the company, along with interest totals to Rs 334.42 crore. Of this, the authority was able to recover Rs. 58.6 crore. The overcharged amount yet to be recovered from the company is around Rs. 275.84 crore, reveals the data.

A Sun Pharma spokesperson responded, “We cannot comment as the matter is sub judice.”

Torrent Pharma has around 20 cases ongoing with the authority, for a principal amount of Rs. 72.5 crore. The overcharged amount along with interest, claimed by NPPA from the company is around Rs.101 crore, of which it has already recovered Rs. 44.7 crore. The company has paid a partial amount in almost all the cases. The outstanding amount to be recovered is around Rs. 56.4 crore.

Message to a Torrent Pharma official failed to elicit response on the topic till the time of this story getting published.

The other companies which have multiple litigations pending with the authority include Dr Reddy’s, Lupin Ltd, Cadila, and multinational companies including Pfizer and Sanofi among others, according to the data.

As reported earlier, the total overcharged amount demanded by the NPPA, including interest, from the period between August, 1997 to March, 2021 was Rs. 9,407.36 crore, of which an amount of Rs. 1,308.58 crore has been realised. The amount outstanding following this is Rs. 8,098.78 crore, of which cases still under litigation are against a total demand of Rs. 6,612.10 crore.

Out of the total, demand of around Rs. 301.88 crore belongs to cases referred to collectors and the amount still to be recovered. Another Rs. 5.46 crore worth of cases are pending with the BIFR or official liquidator.

Without considering the amount under litigation, cases referred to the collector and pending before the official liquidator, the amount the Authority has to collect is around Rs.1,179.34 crore, it added.

According to the revised provisional list of litigation cases, a total of 334 litigation cases for a principal overcharged amount of Rs. 2,551.42 crore is still pending, along with a penalty of Rs. 30.84 crore and a total interest of around Rs. 4,723.37 crore.