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 The National Pharmaceutical Pricing Authority (NPPA) is planning revision of its internal guidelines for processing of overcharging cases under the Drugs (Prices Control) Order (DPCO), 2013, in the backdrop of recent amendments to the relevant portions in the Order.
A proposal to revise the internal guidelines, originally issued on October 7, 2016 for processing of overcharging cases under the DPCO, in the light of the recent amendment was considered in the meeting of the NPPA, held on August 25, 2026.
The Authority has circulated draft guidelines with the members and requested to send their comments if any, within 10 working days.
"The guidelines will stand deemed to be adopted if no comments are received," said the Authority.
It may be noted that the ministry of chemicals and fertilisers has notified the amendment of the DPCO, 2013 in the end of June, with several changes including those related to overcharging cases.
The Ministry has amended Paragraph 14(2), which stipulated that the manufacturers selling a scheduled formulation at a higher price than the ceiling price and local taxes will be liable to deposit the overcharged amount with interest from the date of such overcharging, to include a proviso that the liability of the manufacturer for overcharging shall be restricted to the quantity of stock traded through the distributor or retailer, found to have effected such overcharging, if the manufacturer has been complying with the price revisions in the past.
This came as a relief to the manufacturers, since prior to the amendment, they would have been held responsible for overcharging and brought into the recovery proceedings even if they have complied with the regulations and the overcharging happened at the distributors', stockists' or retailers' end.
The process is currently guided by the internal guidelines issued on October 7, 2016, regarding identification and initiating action for recovery in cases of overcharging under the Drugs Prices Control Order (DPCO).
The guidelines will be revised in order to bring in changes into the procedure followed in overcharging cases, in line with the amendment of the Order.
It may be noted that the NPPA has earlier proposed an amendment to the internal guidelines to make provisions to issue a reminder to the manufacturers or marketers of drugs in connection to overcharging, in cases where the next step is taken by the Authority after two years or more from issuance of show cause notice, demand notice or referring to the District Collector.
The guidelines were issued for the pricing authority to follow in order to rationalise and expedite the monitoring, enforcement and recovery process in overcharging cases, and make it time bound and more transparent in implementation.
It may be noted that the Department-related Parliamentary Standing Committee on Chemicals and Fertilisers has in its latest report, recommended the Department of Pharmaceuticals (DoP) to take urgent measures to expedite measures to dispose the overcharging cases long-pending for recovery. It sought the Department to establish unambiguous rules and guidelines to reduce the scope for litigation, through proactive steps.
It also recommended that the Department may look at feasibility of setting up a dedicated legal cell within the drug price regulatory authority, for effective and timely disposal of cases.
The Panel, reviewing the role, functions, and duties of the National Pharmaceutical Pricing Authority (NPPA) with specific reference to increase in prices of medicines in the country, noted that a substantial portion of the overcharging demand amount that is Rs. 8,526.10 crore out of Rs. 10,013.30 crore (around 85%) remains outstanding as on September 30, 2025.
Out of the overcharging demand amount, an amount of Rs. 5,944.16 crore, which is 70 per cent of the total overcharging demand amount, was under litigation at various stages in the High Court or the Supreme Court. The Panel observed that a significant number of these litigation case, which is 280 out of 345 cases, have been pending for over six to more than 20 years, it added.
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