The National Pharmaceutical Pricing Authority (NPPA) has been functioning without its principal legal consultant since November 30. During this period, top pharmaceutical companies, such as Sun Pharmaceutical Industries and Sanofi India, have challenged the pricing authority’s notices regarding alleged overcharging on cardiovascular and diabetes drugs across various high courts.
According to the information gathered by The Indian Express, at least 26 cases have been filed post November 30, 2017, and high courts have given relief to the firms in most of the cases by granting stay orders against any “coercive action” by NPPA.
Only 16 such cases were filed between January, 2015 and November 30, 2017.
For example, Sun Pharma had filed one such case in Himachal Pradesh High Court on November 22. On November 28, the court asked Centre to file a reply within four weeks. However, no response was filed for months. The court on April 9 said that if Centre does not file a reply within eight weeks, the court will “presume” that Centre does not intend to file a response.
The demand notices were issued by NPPA as it allegedly found companies overcharging on medicines such as Nicorandil — used for chest pains — and Atorvastatin, which lowers bad cholesterol.
These are part of 108 life-saving medicines brought under price control on July 10, 2014, using special powers under para 19 of the Drug Prices Control Order (DPCO), 2013. Para 19 states that under “extraordinary circumstances,” NPPA can cap the price for any drug in public interest.
Out of the 26 cases filed post November 30, 16 are by Sun Pharma, seven are by Sanofi India, two are by Torrent Pharma and one is by Cadila Healthcare. Of the 16 filed between January 2015 and November 30, 2017, 14 are by Sun Pharma, and one each by Dr Reddy’s Laboratories and Cadila Healthcare.
While Torrent Pharma did not respond to the queries sent by The Indian Express, other firms said that they cannot comment as the matter is subjudice.
The NPPA has demanded Rs 433.5 crore — overcharged amount plus interest — from these companies. Around 78 per cent of the amount is yet to be deposited by companies. In majority of the 42 cases, companies have questioned the way NPPA has calculated final overcharged amount plus interest.
Indian Pharmaceutical Alliance (IPA), an organisation of Indian pharma companies, had challenged the 2014 notification to put 108 drugs under price control in Bombay High Court. However, the High Court passed a judgment in September, 2016, upholding the validity of the notification. The IPA then challenged it in Supreme Court but its petition was rejected in October, 2016.
According to a source, Niti Aayog recently proposed that the special powers provided under para 19 should be with the government. However, no decision has been taken yet. Last year, the NPPA had enforced the price control on stents and knee implants using the special powers of para 19. The NPPA chairman then, Bhupendra Singh, was transferred from NPPA on March 1 this year. RK Vats is the current chairman.
Malini Aisola, co-convenor of All India Drug Action Network (AIDAN) told The Indian Express: “The industry has worked in a concerted manner for the weakening of the NPPA because of its tremendous success in court matters. The DOP colluded with the industry to orchestrate a vacuum in the regulator’s legal capacity to facilitate firms to get away with overcharging (because of DPCO violations). The strategy well under play has led to a several companies filing cases in frenzy, across different high courts, and which the government is in a weak position to defend.”
The position of principal legal consultant of NPPA was held by Suneel Chopra till he vacated the post on November 30 last year. Chopra had occupied the position contractually since September 1, 2015. He had superannuated from the NPPA on August 31, 2015, after working as consultant (legal) and deputy director (technical/legal) for around 15 years.
The Department of Pharmaceuticals (DOP) issued the first advertisement to hire a principal legal consultant — on contract basis — on October 9, 2017. In the advertisement, the Central government had said that it is “desirable” for the candidate to have “three years experience in dealing with DPCO court cases and related matters”. A selection panel interviewed candidates based on that criteria. The committee consisted of Rajneesh Tingal, joint secretary, DOP; Dinesh Kapila, economic advisor, DOP; Rakesh Ranjan, then member secretary, NPPA.
Chopra told The Indian Express: “Interviews … were held on November 20, 2017, in the DOP, which was also attended by me.”
On December 20, 2017, the NPPA was briefed that the selection committee has chosen Chopra “as the only suitable candidate and the file is pending for approval in government”. It was decided at this meeting that the NPPA “will write to DOP again to expedite the approval”.
The minutes of this NPPA meeting state: “Further, the authority put on record that Shri Chopra was the only professional in NPPA having legal as well as technical knowledge and well versed with all these cases and therefore, services of Shri Chopra as Principal Legal Consultant should be continued further to properly and effectively safeguard the interest of NPPA/Government in larger public interest.”
The NPPA also “acknowledged the significant contribution made by Shri Chopra in pursuing all court cases efficiently and successfully to obtain a large number of favourable landmark judgments…which helped NPPA in recovery of about Rs 400 crore government dues in last two years”. These dues were demanded by the NPPA from pharma companies for overcharging on medicines. However, DOP did not appoint Chopra even though he was found to be “only suitable candidate”. Jay Priye Prakash, Secretary, DOP and NPPA Chairman RK Vats did not respond to the queries sent by The Indian Express.
On February 28, 2018, Centre issued a second advertisement for the position. This time the condition of “three years experience in dealing with DPCO court cases” was removed. The position continues to remain vacant.
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