Another company is in trouble over allegations of overcharging the government for its drugs. This time, the company is Cipla, and it's received a rather stern note from India's National Pharmaceutical Pricing Authority, which is demanding that the drugmaker pay $86 million for overcharging for certain meds, according to Reuters.
But this isn't a new battle for Cipla and the NPPA. The two parties have been at loggerheads for almost 9 years over the alleged overcharging. In fact, the battle has reached the nation's Supreme Court, The Hindu Business Line reports.
The NPPA regulates the prices of medicines that are under statutory price control, and it can pursue companies that it believes have overcharged for meds. However, Cipla hasn't taken the body's accusations lying down and has issued its own fiery response to this latest salvo: "...[T]he Company has received legal advice that entire amounts demanded by the Government are not tenable and sustainable," Cipla states in an update sent to the Bombay Stock Exchange.
Last summer, the Business Standard called the NPPA's record of recovering money "abysmal," thanks largely to the Cipla case. At the time, the paper counted 15 separate demand notices issued by the regulatory body against Cipla alleging overcharging for such generic drugs as ciprofloxacin, salbutamol, cloxacillin and norfloxacin. Other companies mentioned as having received notices about overcharging included Pfizer ($PFE), Cadila Healthcare, Dr. Reddy's Laboratories ($RDY) and Ranbaxy Laboratories.
- check out Cipla's update
- get more from Reuters
- read the Dow Jones story
- check out the Hindu Business Line report