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Reckitt in HC against latest price cap on Itchguard

Press Trust of India  |  New Delhi 

Healthcare major Reckitt Benckiser today challenged in the High the Centre's latest cap of Rs 2.57 per gram on the price of its anti-fungal cream, Itchguard.

Reckitt claimed before a bench of Justices Sanjeev Sachdeva and A K Chawla that there were infirmities in how the fixed the price ceiling on its product.

Subsequently, the bench issued notice to the Ministry of Chemicals and Fertilisers and the National Pharmaceuticals Pricing Authority (NPPA) and sought their stand on the company's plea by July 11.

The did not stay the NPPA's June 9 decision fixing the cap of Rs 2.57 per gram after the company said the new price would come into effect only 45 days after it was notified.

Reckitt, represented by senior advocate P Chidambaram, contended that the NPPA did not consider its sales in the fast-moving consumer goods (FMCG) category as part of the company's moving annual turnover (MAT) while fixing the price.

The ministry and the NPPA, represented by advocates Anil Soni and Kirtiman Singh respectively, did not agree with Reckitt's claim and said that over the counter sales, which come under the FMCG category, of the cream were considered.

However, the company contended that the NPPA did not take into account the over the counter sale of the cream by general goods stores and only considered the sales by retail chemists.

Reckitt has already approached the high twice since June last year over the cap fixed on the price of its cream and each time the ceiling was revised by the NPPA.

The first time the price was fixed in June last year at Rs 2.36 per gram which was increased to Rs 2.49 per gram by way of a notification in April 21 this year after Reckitt sought a review of the earlier order.

The cap of Rs 2.49 per gram was also challenged by the company in the high court in May this year.

The court had, thereafter, on June 2 given the NPPA time till June 9 to arrive at a new cap.

The authority had subsequently on June 9 arrived at the price of Rs 2.57 per gram.

Reckitt had earlier told the court that according to it, the cap ought to be Rs 2.97 per gram.

The company claimed before the bench today that its entire turnover of Rs 55 crore in a given year was not taken into account and instead the authority only considered an amount of Rs 15 crore while fixing the cap.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 19 2017. 17:48 IST