Drug pricing: Don't take coercive steps against pharma companies, says HC

New Delhi: Delhi High Court today told the government not to take any coercive action against pharma companies, including Novartis India Limited and Cipla Ltd, in connection with the notices issued to them for allegedly not ensuring implementation of the revised drug pricing of 2013.

A bench of justices B D Ahmed and Vibhu Bakhru observed that the demand notices sent by the government ought not to have been sent and directed that they be treated as show cause notices instead.

It directed the government to dispose of the show cause notices within four weeks in accordance with law, the Supreme Court's decisions on drug pricing and after giving the companies an opportunity to be heard in their individual cases.

"No coercive action shall be taken till disposal of the show cause notices," the bench said and disposed of the pharma majors' petitions challenging the Drug Price Control Order (DPCO) 2013 as well as their applications challenging the demand notices.

The bench, however, made it clear that it has not gone into the constitutional validity of the of DPCO provisions challenged in the petitions.

Petitions were filed by pharmaceutical companies and an association of medicine manufacturing firms challenging the government's new drug pricing order that asked them to slash prices of 348 medicines.

The government had in July this year issued the demand notices alleging that drugs whose prices had been slashed as per the DPCO 2013, were being sold at a higher price.

Central government standing counsels Jasmeet Singh and Amit Mahajan told the court that it was the pharma companies' responsibility to ensure that their drugs were not sold at a higher price to the consumers.

The companies, represented by senior advocates Rajiv Nayar and Pratibha Singh, refuted the allegations saying that they have already issued the revised price lists as required under the law and done all they can to ensure the medicines whose prices were slashed are sold as per the revised prices.

They also said that they are not responsible if retailers, chemists or dealers sold the drugs at a higher price.