[india-drug] 50 south based SSIs overcharging essential drugs

[Sunitha Srinivas <s.srinivas@ru.ac.za>]

(Source:
http://www.pharmabiz.com/article/detnews.asp?articleid=20229§ionid=
Thanks?SS)


NPPA issues show cause notices to 50 south based SSIs for overcharging
essential drugs
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Tuesday, February 03, 2004 08:00 IST 
P B Jayakumar, Chennai

In a first of its kind initiative against the small scale sector drug
manufacturers, the National Pharmaceutical Pricing Authority (NPPA) is
learnt to be in the process of issuing show cause notices, through the
respective state drug authorities, to over 50 manufacturers in south
India for overpricing some fast moving drugs in violation of the DPCO,
95.

Industry sources fear that NPPA is in the process of scanning other
drugs as well and may spread the dragnet to other states, which will
invariably affect all SSI manufacturers in the country. 

The action is aimed at units manufacturing of Ibuprufen and
Paracetamol, Amoxyillin with Cloxacillin, Ranitidine and its
combinations and Ranitidine. At least 10 manufacturers in Chennai,
besides many in other parts of south India, have received the show
cause notices with an ultimatum to respond within seven days to file
details of manufacturing, marketing, price of each batch, batch numbers
etc. related to these drugs, applicable since 1995 when the DPCO came
into force. 

By this, these SSI manufacturers may be forced to repay crores of
rupees, overcharged by them. The list includes a few manufacturers who
are currently not even manufacturing these combinations. 

Interestingly, sources in Chennai noted that the Tamil Nadu
Pharmaceutical manufacturers Association (TNPMA) obtained a stay order
from the Madras High Court in 1999 to exempt SSI manufacturers from
filing price list with NPPA under Section (8) of the Drugs and
Cosmetics Act. The SSIs also approached the Central Health Ministry in
1999 to exempt SSIs from adhering to DPCO order as regulated drug
prices are governed by the leader drug prices manufactured by
multinationals. However, the government has not heeded to their
demands. 

"Suppose a multinational makes 10 lakh capsules of Vitamin B complex at
a price of Rs.2000 including the manufacturing and lab test costs, a
SSI unit makes only 2000 capsules at the same expenses, because the
multinationals have advantages related to volume production and bulk
raw material purchase. It is injustice when the government mandates
SSIs to sell at the same price of the leader brand. Therefore, some
SSIs are forced to put higher prices for survival," said Kanthilal Jain
of Farm India. 

SSI sources fear this is only the beginning of what is to come. "So far
NPPA was not seriously pursuing this issue. This could be because it
was sympathetic to the practical difficulties of SSIs in adhering with
the DPCO prices. For the time being NPPA has chosen only fast moving
and readily available drugs. Soon it will extend the net to other drugs
and manufacturers as well," alerts Ananda Raj of Agpa Pharmaceuticals.

According to Sitharaman of Safeline Pharmaceuticals, the DPCO itself
has provisions to exempt SSIs and the NPPA should help the sector. The
Section 25 of DPCO says 'Government may having regard to the fact that
factors mentioned in Sub Para 2; subject to such condition as it may
specified by an order in the official gazatte to exempt any
manufacturer from the operation of all or any provision of this order
and subject to factors like number of workers employed, amount of
capital, range or group or type and sales turnover" notes Sitharaman. 

It is learnt that the various SSI organizations are planning to
strongly oppose the NPPA move. The Federation of the Pharmaceutical
Manufacturers Association of South India and the Confederation of
Indian Pharmaceutical Industry (CIPI) are planning to debate the future
course of action in its forthcoming meeting within a fortnight, it is
learnt.




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