Govt 'can' fix ceiling price of asthma drug: SC

The Delhi high court had rules that government does not have power to fix price of doxofylline

The Supreme Court today declared that the government has the power to fix the ceiling price of asthma drug doxofylline formulation under the Drug Prices Control Order and overruled the Delhi high court judgment which had held that the government did not have the power.

Two pharmaceutical companies, Swiss Garnier Life Sciences and Mars Therapeutics & Chemicals Ltd had challenged two price fixation notifications issued by the government  in April and November 2009.

The high court had quashed the notifications stating that the ‘doxofylline’ is not a bulk drug within the meaning of the Price Control Order. The government appealed to the Supreme Court.

Allowing the government’s appeal, the bench consisting of Justice G S Singhvi and Justice S J Mukhopadhya held that doxofylline is derivative of theophylline, a bulk drug, and doxofylline in any formulation comes within the definition of the scheduled formulation. Therefore it was within the jurisdiction of the government to fix the ceiling price of doxofylline formulation.

The government issued the notifications after getting expert opinion from different sources.

The dispute between the government and the pharma majors started following an article in a leading daily captioned, ‘Drug companies chasing profits, cheating patients; Costlier asthma drugs duck curb, hit market’. The writer, Dr C M Gulati, gave various reasons for doxofylline entry into the country, and asserted that “ ‘doxofylline’ has been offered as a more profitable alternative to theophylline.”

Further, by successive orders in 2006, all loopholes to sell Theophylline products at high profit margins have been closed by the National Pharmaceutical Pricing Authority (NPPA), the body that monitors medicine prices in India. Therefore, nearly all companies selling Theophylline formulations have been scouting for similar molecules outside the price control system irrespective of whether they are similar, better or even worse than their current brands, Dr Gulati, editor of a medical journal stated.