The Food and Drugs Administration Commissioner Uttam Khobragade has ordered cancellation of all statutory licences granted to the sick public sector company, Maharashtra Antibiotics & Pharmaceuticals Ltd, located at MIDC, Hingna in Nagpur.
In addition, MAPL officials and their business partners also face prosecution for violation of Drugs (price control) order for selling drugs at prices higher than those stipulated in the DPCO schedule.
The order cancelling statutory licenses was issued last week following investigations launched by the FDA on a complaint of Castribe Karmachari Sangh, MAPL. The investigation was guided at every stage by Khobragade himself.
The cancellation of statutory license means that MAPL's manufacturing and wholesale licenses have also been revoked thereby bringing to halt all activities carried out by the drug company and on its behalf by other parties.
The joint commissioner of FDA, Nagpur, A M Satpute said that the process for cancelling the loan licenses has also begun.
MAPL officials and their business partners also face prosecution for violation of Drugs Prices Control Order for selling drugs at prices higher than those stipulated in the DPCO.
"They were not doing business in an ethical way. We had no other option but to cancel the licenses," Satpute said.
The FDA found that MAPL did not manufacture the medicines that were sold under its name, neither did it have the technical staff.
Its officials, in collusion with owners of companies such as Plus Pharmaceuticals, Map Pharma and Relief Labs, did not manufacture any medicine at the MAPL plant but procured orders from government hospitals misusing their position as public undertaking.
MAPL was not involved in either manufacture or sale, except that its name was printed on the packing material of the medicine, the FDA said.
MAPL's production was only on paper: MAPL misused the licenses issued by FDA and hence their continuation was against public interest, Khobragade told this newspaper.
The loan license permits the licensee to carry out production in another firm if it has a supply order in excess of its manufacturing capacity or if it does not have the facility to manufacture a particular drug.
However, in MAPL's case, the entire production was being carried out in outside firms, Khobragade said.
Giving an instance of the extent of "money spinning" in the business, he said MAPL showed that it purchased Norlid tablets at Rs 27.46 and sold it to Plus Pharma at Rs 28.36.
The fact, however, was that the medicine was procured directly by Plus Pharma from some third party at Rs 28.36 and sold to District Health Officer, Mangalore for Rs 105.58 under the cover of MAPL.
This is the scale of loot, which was shared by the officials of MAPL and Plus Pharma. MAPL did not have the bills, therefore clearly establishing that Plus Pharma did everything by misusing the name of MAPL, he said. The FDA has estimated the scale of loot at a whopping Rs 32 crore in the last three years.Khobragade also disclosed that the FDA will be prosecuting officials of MAPL and Plus Pharma under Essential Commodities Act for violation of various provisions of Drugs & Cosmetics Act.