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Informist, Tuesday, Sept. 22, 2026

 

--HC quashes NPPA notification on price cap of scheduled drug formulations

 

By Surya Tripathi

 

NEW DELHI – The Bombay High Court Tuesday quashed the National Pharmaceuticals Pricing Authority's 2009 notification that stated that any formulation that has a scheduled drug as one of its ingredients will be subject to price ceiling unless the manufacturer subsequently gets a specific price fixed by the authority for that formulation or composition. It also quashed the pricing authority's 2007 notification that fixed the price ceiling for multivitamin and mineral tablets to the extent of its applicability to Cartigen Forte of Pharmed Ltd.

 

A perusal of the 2009 notification shows that it is extremely widely worded and violates the Drug (Price Control) Order 1995 itself, said the high court. Although it has been issued purportedly by exercising power under the 1995 Order, the crucial part of calculation of ceiling price as per the formula under the 1995 Order has been lost sight of, said the court. The moment the formula for calculation of ceiling price as per 1995 Order is taken away, it becomes clear that the 2009 notification is rendered ultra vires 1995 Order itself, said the court.   

 

The 2009 notification is clearly over broad, expansive and operates in the teeth of the paragraphs of 1995 Order itself, said the court. In other words, it is beyond the power vested in the pricing authority to issue such kind of notification, it said. As a matter of fact, it indicates abdication of the responsibilities and obligations cast upon the Centre and the pricing authority to specifically fix ceiling price under the 1995 Order. The exercise of power by the pricing authority for issuing the 2009 notification is wholly arbitrary and hence, unsustainable, the court said.

 

On the 2007 notification, the high court noted that the petitioner's formulation in the present case was Cartigen Forte, used for treatment of osteoarthritis. Since the formulation's ingredients included vitamin C and vitamin E prior to January 2010, it could be covered under the definition of scheduled formulation, as per the 1995 Order, it said. The government and the pricing authority were required to pass an order by notification in the official gazette under 1995 Order to fix the ceiling price of the subject formulation, said the court. However, no such exercise was ever undertaken by the Centre and the pricing authority in respect of the subject formulation, said the court.

 

In such a situation, the Centre and the pricing authority were not entitled to apply the 2007 notification to claim that the ceiling price specified therein applied to the subject formulation of Pharmed, said the court. The 2007 notification specifically showing the ceiling price fixed for the formulations 'multivitamin and mineral tablets' and 'multivitamin and mineral capsules' cannot be applied to the subject formulation, in which the active pharmaceutical ingredients are Glucosamine Sulfate Potassium Chloride, Chondroitin Sulfate Sodium and Methyl Sulfonyl Methane, it said.

 

As a consequence of quashing the notifications, the high court asked the Centre and the pricing authority to not act upon the demand notice of INR 134.11 million issued to Pharmed. The pricing authority had alleged that Pharmed's sale price for its formulation was higher than the ceiling price and on that basis, the company should pay the overcharged amount.

 

The petitioner had argued that the central government never fixed the ceiling price for the subject formulation manufactured either prior to January 2010 or from January 2010 and, therefore, the demands were wholly unjustified. Pharmed said that the 2007 notification pertains to multivitamin and mineral tablets or capsules, which have nothing to do with the subject formulation of the petitioner. The subsequent 2009 notification is extremely broadbased and it is in the teeth of the paragraphs of the 1995 Order itself, indicating that it deserves to be quashed and set aside on these grounds, said the petitioner.  End

 

Edited by Avishek Dutta

 

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