Reckitt in HC against price cap on Itchguard cream

The Delhi High Court today sought the Centre's response on a plea by healthcare major Reckitt Benckiser against a price cap of Rs 2.49 per gram on its anti- fungal cream, Itchguard.
Reckitt contended before a bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar that the government has not taken into account the market share and turnover of its product and that of similar variants while fixing the ceiling price.
The court then issued notice to the Ministry of Chemicals and Fertilisers as well as the National Pharmaceuticals Pricing Authority (NPPA) and sought their stand on the healthcare company's claim that the ceiling price ought to be Rs 2.97 per gram.

The bench told the government if the pricing required re-consideration, it should do so on its own without moving the court and listed the matter for hearing on June 2.
The court gave an earlier date after Reckitt, represented by senior advocate Kapil Sibal, said the firm has to implement the April 21 ceiling price order from June six.
During the hearing, Additional Solicitor General (ASG) Sanjay Jain, appearing for the ministry and the NPPA, said the earlier cap of Rs 2.36 per gram was reviewed and raised by 13 paise. He also said the decision to cap the price was taken in public interest.

Sibal, on the other hand, said if the company has to sell as per the cap of Rs 2.49 per gram, and not Rs 2.97 per gram, then it would not be able to recover the loss it would suffer.

He told the bench that when the company had moved a plea before the government for a review of the earlier price ceiling of Rs 2.36 per gram, the NPPA was directed to re-fix the ceiling price by considering the market share and turnover of Itchguard and its variants.
Reckitt, in its plea, has alleged that its entire turnover of Rs 54.90 crore in a given year was not taken into account and instead the authority only considered an amount of Rs 29.71 crore while fixing the cap.

It said it wants the NPPA to fix the cap by taking into account its market share and turnover, as was said in the ministry's office memorandum to the authority.