DoP asks manufacturers to disseminate revised price information to retailers, distributors and stockists

Documentary evidence of communication may protect manufacturers from the claim of overcharging the medicine

The Department of Pharmaceuticals (DoP) in its recent notification has clarified that if manufacturers are able to produce documentary evidence of communicated revised price with distributors, retailers or stockists, the liability of depositing the overcharged amount will be limited only to stock handled by the concerned retailer/ distributor or stockist.

DoP, in order to overcome the issue of overcharged medicines, has urged the manufacturers to carry the revised price as notified by the NPPA from time to time and disseminate the revised price to all the concerned including retailers, distributors and stockists to avoid the liability of depositing the overcharged amount along with interest from date of such overcharging.

DoP in its notification stated that if the manufacturers are able to produce documentary evidence of having communicated the revised price list to retailers / distributors or stockists and if retailer/ distributor or stockist is found selling the medicine above ceiling price, the overcharged amount would be limited only in respect of the stock handled by the concerned retailer/ distributor or stockist pertaining to that batch.

As per para 24, DPCO 2013, every manufacturer shall issue a price list and supplementary price list, if required, in Form V to the dealers, State Drugs Controllers and the government indicating reference to such price fixation or revision as covered by the order or Gazette notification issued by the government, from time to time. The notification also mentions that every retailer and dealer shall display the price list and the supplementary price list, if any, as furnished by the manufacturer, on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same.

The manufacturers may increase the maximum retail price (MRP) of scheduled formulations once in a year, in the month of April, on the basis of the wholesale price index with respect to previous calendar year, and the information about the revision, shall be forwarded to the government in either electronic or physical form in Form-II within a period of fifteen days of such revision. Non-submission of information is construed as non revision of MRP by the government and the concerned manufacturer shall be liable to deposit the amount charged over and above the pre-revised maximum retail price (MRP), along with interest thereon from the date of overcharging.

As per the last notification on overcharging of drugs by NPPA dated on February 23, 2017, there were 634 drugs whose MRP were above the actual ceiling price notified by the government. The NPPA had listed more than 150 pharma companies for overcharging medicines including leading pharma companies like Sun Pharmaceutical, Cipla, Lupin, Abbott Healthcare, Zydus Cadila, Wockhardt, Torrent Pharmaceuticals, Sanofi, Biocon, AstraZeneca, Dr Reddy’s Laboratories, GlaxoSmithKline, Intas Pharmaceuticals, Macleods Pharmaceuticals, Morepen Laboratories, Mylan Pharmaceuticals, Pfizer, Novartis among others.