Over-pricing of drugs: HC reserves order on Pharma firm plea

Delhi High Court today reserved its order on a plea by Hyderabad based pharma firm seeking quashing of its single judge bench order directing it to deposit 25 per cent of over-charged amount on its drug with National Pharmaceutical Pricing Authority (NPPA).
The bench headed by Chief Justice G Rohini said it would consider the matter and pass an order.
M/s Biological E Ltd manufactures a Tetanus vaccine with the brand name Bett Tetanus Vaccine.
Appearing for the pharma firm, senior advocate Kapil Sibal said the single judge bench was not correct in directing the appellant to deposit 25 percent of the demanded sum by NPPA as it was "excessive".

Additional Solicitor General Sanjay Jain said the pharma firm has been selling the vaccine in the market at the rate of Rs 11.61 before the notification and at the rate of Rs 10.80 after the notification, while the price was fixed as Rs 10.29 for each pack.
He said that following this, a show cause notice was issued by NPPA to the firm on November 28 last year to which its reply was found to be unsatisfactory.

"The firm has sold the drug for a price more than the prescribed selling price. The amount demanded by NPPA is Rs 33,28,03,171 (which) is inclusive of interest calculated upto December 15, 2014," he said.

To this, the bench said the matter should be decided in such a way that it was acceptable to both parties.
Sibal contended that the order of single judge should be set aside as it has overlooked the flawed computation of the payment demanded by NPPA and no coercive action should be initiated against the firm till the disposal of appeal.
He said the order was in blatant disregard to the provisions of Drugs and Cosmetics Act while computing the ceiling price of the drug.
The single judge bench of the High Court had disposed of the plea of firm challenging the demand notice of NPPA on January 8, 2015, while directing it to deposit 25 per cent of the demand sum Rs 33,28,03,171 till pendency of the matter.