India Claws back DPEA Drug Profits

India has served over 150 notices on all drugmakers in India to recover 5-10 billion rupees ($135.2-$270.4 million) under the Drug Price Equalization Account of 1979. Earlier estimates of arrears based on actual claims were 3.15 billion rupees, of which the industry has deposited 187.5 million rupees ($5 million).

each day for the past few months, about five new notices have been dispatched for the "unintended profits" made by companies on sales of bulk drugs listed under the Drug Price Control Order of 1979; not even large firms like Ranbaxy and Pfizer have been spared. The Ministry of Chemicals and Fertilizers is asking them for details of the prices at which formulations have been sold or bulk drugs purchased.

The notices had been held up by litigation, but last year the Supreme Court ruled in the government's favor, empowering it to claim the amounts outstanding under the DPEA (Marketletter June 12, 1995). If the companies fail to cooperate with the Ministry, liabilities will be determined based on published data. In the event of a dispute, a three-member committee, headed by a retired judge, will adjudicate.