As readers would recall, earlier this month National Pharmaceutical Pricing Authority had capped the prices of 108 anti-diabetic and cardiovascular formulations, sending the pharma industry into a tizzy. I had blogged about it here.
It was noted that the inter-brand price differentials for some drugs was as high as ₹360. Even after accounting for quality differences,huge inter-brand price variation is indicative of a severe market failure. The NPPA invoked powers vested with it under paragraph 19 of DPCO, 2013 according to which the NPPA may “in extraordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any drug for such period as it deems fit”.
Pharma industry lobbyists Organization of Pharma Producers of India (OPPI) and Indian Pharma Alliance (IPA) challenged the NPPA decision and filed a petition against the NPPA price cap last week in the High Court.
The petition was filed against the jurisdiction of the pricing regulator (NPPA) to determine prices of non-essential medicines and the interpretation of Paragraph 19. In this article the IPA chief was quoted as saying “no extraordinary circumstances that have arisen since the promulgation of the DPCO 2013 for paragraph 19 to be invoked. Inter-brand differences are not ‘extraordinary’ by any means nor are they an indication of market failure”
A NPPA official however contended that “If a wrong or discrepancy has existed for years and has not been noticed or acted upon, that doesn’t become right just by virtue of existing for so many years”.
According to live mint, a bench of Justice Vibhu Bakhru refused to allow Organization of Pharmaceutical Producers of India’s (OPPI) petition seeking a stay or status quo order preventing the NPPA from taking any further steps in pursuance of its price cap notification.
The Order stated “I am not inclined to stay it or pass any ad-interim order.” The Delhi High court also ordered the respondent NPPA to file counter reply in three weeks and also justify that the powers exercised by the NPPA is not unbridled as contended.
It will be interesting to see how the term” extraordinary circumstances” is interpreted by the court. Watch this space for more!