×
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Legal advice may spike govt stand on drug price

Last Updated 24 October 2014, 20:01 IST

As the government and pharmaceutical industry battle it out in the courts on capping the market prices of several medicines, the opinion of Solicitor General Ranjit Kumar may weaken the government’s case in the Delhi and Bombay High Courts.

Kumar has criticised the Na­tional Pharmaceutical Pricing Authority for coming out with its July 10 order putting a price cap on 50 drugs – translating to 108 formulations – that are not part of the national list of 348 (640 form­u­l­ations) essential medicines and hence outside the regular ceiling.

The NPPA used a special provision in the law called Paragraph 19 of the Drug Price Control Order 2013 to impose the price ceiling. The industry promptly went to court, opposing the orders as well as the guideline that was the backbone of the order.

“The Solicitor General's opinion will weaken the government's stand in these cases,” said an activist from the All India Drug Action Network, which is a party to the case in the Delhi High Court.

Faced with the legal hurdles, when the Department of Pharmaceuticals sought the Solicitor General’s opinion, Kumar said, “The power to fix ceiling price or retail price under Para-19 is only a residuary and emergency power, which is not to be exercised as a method of general dispensation.

The object behind Para-19 is to enable the government to fix prices under special and extraordinary circumstances and this power is to be used sparingly in furtherance of public interest,” the Solicitor General said in his August 28 opinion.

The medicines that came under price control belong to two different groups – for controlling diabetes (like Metformin and Pioglitazone) and heart diseases (such as Atorvastatin, Ramipril and Atenolol).

“In terms of formulations, 9 out of 11 in anti-diabetes group and 41 out of 127 in cardiovascular disease group were affected. Hence it has not been taken as a general measure but as something specifically resorted to only in cases where large public interest is served,” the NPPA said in an affidavit in the Delhi High Court in October.


Companies like Abbott, AstraZeneca, Boeringer Ingelheim, GSK, MSD, Novartis, Pfizer and Sanofi implemented the NPPA order, benefiting the common man as the market price of several medicines for diabetes and heart diseases were lowered, said the drug price fixing agency in its affidavit, available with Deccan Herald.

But the government's highest law officer cited three preconditions – existence of extraordinary circumstances, public interest and fixed time period – to invoke the special clause.  “The July 10 orders do not meet these three tests. None of the orders clearly state any extraordinary circumstances neither do they clearly disclose the public interest that is sought to be balanced,” he said.

NPPA imposed the price cap following an internal guideline. The contentious guideline was withdrawn on September 22 on the basis of the Solicitor General’s opinion.
The industry argues that since the price capping orders were based on the guideline, the orders, which are still in place, should also be revoked. The Indian Pharmaceutical Alliance has challenged the government in the Bombay High Court while the Organisation of Pharmaceutical Producers in India knocked on the doors of the Delhi High Court.

 

ADVERTISEMENT
(Published 24 October 2014, 20:01 IST)

Follow us on

ADVERTISEMENT
ADVERTISEMENT