Indian medical reps accuse drug companies of overcharging

The Federation of Medical and Sales Representatives' Associations of India (FMRAI), which represents one-fourth of the 200,000 registered medical representatives, has alleged that pharmaceutical producers are making a mockery of the governmentís price control initiatives by increasing the prices of medicines at will.  

According to local media reports, in a note to government ministers, the federation said in an official note to government ministers that companies charge retail prices that in some cases are over hundred times more than the government-mandated price. 

Amitava Guha, joint general secretary of the association, said there were several essential or popular medicines for which prices have increased even up to 600 per cent over the last nine years. 

The National Pharmaceutical Pricing Authority (NPPA) recently found that the prices of 15 top-selling medicines that were taken out of direct price control 12 years ago increased 9.65 per cent a year, against a one per cent rise for medicine that continued under price control.  

The FMRAI data suggest that the situation could be much more serious than the government findings. The industry has long contested the charges of over-pricing and had recently announced that it would cut some prices voluntarily.  

Terming the voluntary price reduction a 'great hoax,' the FMRAI has said that even large companies have flouted the pricing norms fixed by the government, without naming names. It has made the accusation in the past that while a company cut the price of one brand of a medicine, it continued to overcharge on other brands of the same medicine.  

The FMRAI has also said that the government has been unable to recover the 'overcharged' amount from companies in any significant way.  

Official statistics indicate that the NPPA was able to recover only INR 1bn as of 31 July 2007 of the total recovery notices for INR 14.3bn issued over the past 10 years or only seven per cent. The government and the companies say that the non-recovery is primarily due to the litigation attached to these recovery notices.  

The NPPA is known to be handling 75 court cases filed by pharmaceutical companies against the government in various parts of the country on the issue.